SANTA ANA MANAGEMENT ASSOCIATION (2008-2010)

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Internal Revenue Service confirming that these payments are deferred compensation, and not ordinary income. In the event that the City receives a ruling from the Internal Revenue Service that such payments are ordinary income of the employees instead of deferred compensation, the City's obligation to make such payments shall discontinue and in place thereof the base salary of each said employee shall forthwith be increased by fourteen (14) salary rate ranges (Administrative Management employees), or sixteen (16) salary rate ranges after January 1, 2009, or approximately seven percent (7/'0) (Middle Management employees), or approximately eight percent (8%) after January 1, 2009. For the purpose of reporting an employee's compensation to CaIPERS, the City shall include these payments as if they were a part of the employee's base salary. 13.5 2. 7'}'0 at 55 Service Retirement Benefit for Miscellaneous Members. Effective January 1, 2009, the City agrees to amend its retirement contract with CalPERS to provide Miscellaneous employees covered by this Agreement with the 2.7% at 55 Service Retirement benefit. Pursuant to CalPERS regulations, this new formula will apply to employees that are in active status on the date this amendment takes effect. This new formula will apply to each year of eligible service credited with the City of Santa Ana. Payment of New 2.7'}'0 at 55 Service Retirement Benefit. Miscellaneous employees covered by this Agreement agree to pay 6.3,},0 of CalPERS reportable compensation toward the cost of the 2.7% at 55 enhanced retirement formula, as set forth in Article V, Section 5.3I. Pre- Taxable Benefit. To the extent permitted by CalPERS and Internal Revenue Service regulations, the City shall make the above employee deductions pre-tax contributions. AMENDED ARTICLE XX 20.1 The term of this Memorandum of Understanding shall commence on the date when the terms and conditions for its effectiveness, as set forth in Article III, Implementation, are fully met, but in no event shall said Memorandum of Understanding become effective prior to 12:01 a.m. on July 1, 2004. This Memorandum of Understanding shall expire and otherwise be fully terminated at 12:00 midnight on June 30, 20G810.