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ARTICLE XIV 14.0 RETIREMENT 14,1 General. The terms of the existing contract between the City and California Public Employees' Retirement System (CaIPERS) governing the City retirement benefits of employees covered by this Agreement are incorporated by reference herein. The City shall continue to make contributions to CalPERS in accordance with its contract with CalPERS for employees covered by said contract as amended. 14.2 Deferred Retirement. The City will continue to make payment to CalPERS on behalf of each affected employee, in an amount necessary to pay one hundred percent (100 %) of his or her individual employee retirement contribution, Such payments shall be credited to the individual employee's CalPERS account, A. With respect to "safety- member" employees, the City shall pay an amount equal to nine - ninths (9 /9ths) of his or her individual employee retirement contribution. B. With respect to "miscellaneous - member" employees covered by this Agreement, the City shall pay an amount equal to eight - eighths (8 /8ths) of his or her individual employee retirement contribution. Such payments are not increases in base salary and no salary rate ranges 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, and not ordinary income. For the purpose of reporting an employee's compensation to CalPERS, the City shall include these payments as if they were part of the employee's base salary. 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 eighteen (18) salary rate ranges (9 %) for "safety member" employees covered under the 3% at age 50 CalPERS formula and sixteen (16) salary rate ranges (8 %) for all "miscellaneous member" employees covered under the 2.7% at age 55 CalPERS Formula. 14.3 1959 Survivor's Benefit. Effective December 7, 2002, the City shall provide CalPERS fourth level of 1959 Survivor's Benefits to all eligible employees in the unit. 38 25F -40