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ARTICLE XIV <br />14.0 RETIREMENT <br />14.1 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 for <br />employees covered by said contract as amended. <br />14.2 Deferred Retirement. The City will continue to make payment to CalPERS on behalf of each <br />affected employee, in an amount necessary to pay one hundred percent (100 %) of his or her <br />individual employee retirement contribution. Such payments shall be credited to the <br />individual employee's CalPERS account. <br />A. With respect to "safety- member" employees, the City shall pay an amount equal to <br />nine- ninths (9 /9ths) of his or her individual employee retirement contribution. <br />B. With respect to "miscellaneous- member" employees covered by this Agreement, the <br />City shall pay an amount equal to eight - eighths (8 /8ths) of his or her individual <br />employee retirement contribution. <br />Such payments are not increases in base salary and no salary rate ranges 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, and not ordinary income. <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 />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 (18) salary rate ranges (9 %) for <br />"safety member" employees covered under the 3% at age 50 CalPERS formula and sixteen <br />(16) salary rate ranges (8 %) for all "miscellaneous member" employees covered under the <br />2.7% at age 55 CalPERS Formula. <br />14.3 1959 Survivor's Benefit. Effective December 7, 2002, the City shall provide CalPERS <br />fourth level of 1959 Survivor's Benefits to all eligible employees in the unit. <br />38 <br />