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11 <br />SLMO 2022 Memorandum of Understanding <br />the employees’ contribution rate as established by law, equal to that percentage of the <br />employees’ "compensation" as that term is administered by the Board of Administration <br />of CalPERS, for the purpose of computing final compensation. Such contributions shall <br />be reported to CalPERS as follows: <br /> <br />9.1 Tier One: For miscellaneous management employees hired prior to May 6, 2010, <br />the City shall maintain a contract with CalPERS for the provision of a 2.5% @ 55 <br />(highest 12 months) retirement benefit formula. <br /> <br />These plans shall contain the following options: <br /> <br /> Remarriage post-survivor allowance continuance <br /> Credit for unused sick leave option <br /> Military service credit option <br /> <br />Employees shall pay the 8% of the employee contribution. Pursuant to IRS Code <br />Section 414 (h) (2), these payments shall be made on a pre-tax basis. <br /> <br />9.2 Tier Two: For “classic” CalPERS members hired on or after May 6, 2010, the City <br />shall maintain a contract with CalPERS for the provision of a 2% @ 55 (highest 36 <br />months) retirement benefit formula pursuant to CalPERS requirements. Such plan <br />will also contain the three optional benefits listed above. <br /> <br />Employees shall pay 7% of the employee contribution. Pursuant to IRS Code <br />Section 414 (h) (2), these payments shall be made on a pre-tax basis. <br /> <br />9.3 Tier Three: For employees hired on or after January 1, 2013 and classified as “new” <br />members of CalPERS as defined by Public Employees’ Pension Reform Act <br />(PEPRA), the City shall maintain a contract with CalPERS for the provision of a 2% <br />@ 62 (highest 36 months) retirement benefit formula. Also pursuant to PEPRA, <br />these employees are responsible for paying one-half of the normal cost of this <br />retirement plan. <br /> <br />Section 10.0 Compensation <br /> <br />Salary for each classification varies from step 1 to step 5 as shown in Appendix A, salary <br />schedule. New hires and promotions may be placed at the step closest to a minimum five <br />percent (5%) base salary increase, or any step, subject to the City Manager’s final <br />approval. Employees may be advanced from their current step to the next higher step <br />after each year of satisfactory performance. <br /> <br />The appendix reflects wage adjustments as follows: <br /> <br />A six (6%) percent across the salary increase effective January 1, 2022. <br /> <br />Section 11.0 Application of Pay Rates <br /> <br />502