SANTA ANA POLICE BENEVOLENT ASSOCIATION (5)

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. employees as of June 30, 1983. Section 5. The City shall retain the right to change health, dental, long-term disability and life insurance carriers, administer the insurance benefits provided thereunder, and select and/or change any excess or supplemental insurance carriers as a part of any self-insurance plan during the term of this Agreement, provided that employees covered by this Agreement continue to receive the same or equivalent benefits. Section 6, Optional PHA $enefit Plans.. By majority vote, Association members may opt to receive cash equivalent of premium contributions made by City on behalf of employees, to purchase group health and/or group dental and/or group L.T.D. insurance coverage through the Association or its Agent; provided, however, all members of the Association waive, in writing, coverage under City-sponsored group health and/or group dental and/or group L.T.D. ARTICLE XTI) - RETIREMENT Section 1 - General. The terms of the existing contract between the City and the California Public Employees' Retirement System (P.E.R.S.) governing the retirement benefits of employees covered by this Agreement, as said contract was amended effective October 1981 to provide for a different schedule of benefits for employees hired after the effective date of such amendment, are incorporated by reference herein. The City shall continue to make contributions to P.E.R.S. in accordance with its contract with P.E.R.S. for employees covered by said contract as amended. Section 2. -_Deferred Retir ment. Effective July 1 , 1983, the City will increase the amount of payment it makes to the P.E.R.S. on behalf of each employee covered by this Agreement by two (2) percentage points so that for each affected "safety-member" employee covered under the 2% at Age 50 Formula the City shall pay an amount equal to seven-ninths (7/9ths) of his or her individual employee retirement contribution; and for each affected "safety-member" employee covered under the 2% at Age 55 Formula and each affected "miscellaneous-member" employee the City shall pay an amount equal to 100% of his or her individual employee retirement contribution. Such payments shall be credited to the individual employee's P.E.R.S. account. Such payments are not increases in base salary and no salary rate range applicable to any of the employees covered by this Agreement shall be changed or deemed to have been changed by reason thereof. As a result, the City will not treat these payments as ordinary income and, thus will not withhold federal or state income tax from said payments. The City has received an opinion or ruling from the Internal Revenue Service confirming that these payments are deferred compensation not ordinary income. In the event that the City receives a subsequent 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 affected employee shall forthwith be increased by fourteen (14) salary rate ranges (7.0%) . For the purpose of reporting an employee's compensation to P.E.R.S. , the City shall include these payments as if they were a part of the employee's base salary. 26