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ARTICLE ×II1 <br /> <br />13.0 RETIREMENT <br /> <br />13.1 <br /> <br />13.2 <br /> <br />General. The terms of the existing contract between the City and California Public <br />Employees' Retirement System (CalPERS) governing the City retirement benefits of <br />employees covered by this Agreement are incorporated by reference herein. The City shall <br />continue to make contributions to CalPERS in accordance with its contract with CalPERS <br />for employees covered by said contract as amended. <br /> <br />Deferred Retirement. The City will continue to make payment to CalPERS on behalf of each <br />affected employee, one hundred percent (100%) of his or her individual employee retirement <br />contribution. Such payments shall be credited to the individual employee's CalPERS <br />account. <br /> <br />Such payments are not increases in base salary and no salary rate range applicable to any of <br />the employees covered by this Agreement shall be changed or deemed to have been changed <br />by reason thereof. As a result, the City will not treat these payments as ordinary income and, <br />thus will not withhold Federal or State income tax from said payments. The City has <br />received an opinion or ruling from the Internal Revenue Service confirming that these <br />payments are deferred compensation, not ordinary income. <br /> <br />For the purpose of reporting an employee's compensation to CalPERS, the City shall include <br />these payments as if they were part of the employee's base salary. <br /> <br />in the event that the City receives a ruling from the Internal Revenue Service that such <br />payments are ordinary income of the employees instead of deferred compensation, the City's <br />obligation to make such payments shall discontinue and in place thereof the base salary of <br />each said employee shall forthwith be increased by eighteen (I 8) salary rate ranges (9%) for <br />"safety member" employees covered under the 3% at Age 50 CalPERS Formula and fourteen <br />(14) salary rate ranges (7%) for all "miscellaneous member" employees covered by this <br />Agreement. <br /> <br />Effective July 1, 1994, the City will provide CalPERS third level of 1959 Survivors' Benefits <br />to all eligible employees in the unit. <br /> <br />If the City's actuarial valuation from CalPERS indicates an employer contribution rate of <br />0%, then the City will provide, as soon as practicable, CalPERS fourth level of 1959 <br />Survivors Benefit to all eligible employees in the unit. If, however, this CalPERS valuation <br />indicates an employer contribution rate of more than 0%, the City and Association agree to <br />reopen this Article of the MOU for further discussion. <br /> <br />32 <br /> <br /> <br />