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12 <br />SLMO 2023-2028 Memorandum of Understanding <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 />Section 10.0 Compensation <br /> <br />Salary for each classification varies from step 1 to step 5 as shown in Appendix B, 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 appendices reflects wage adjustments as follows: <br /> <br />Effective January 1, 2023, all classifications shall receive an equity salary adjustment with <br />exceptions noted below. The adjustment will be 5% above the salary range placement <br />from the 2022 compensation study completed by Koff and Associates, as shown in <br />Appendix A. All employees will remain in their current step. <br />• Positions that are above the equity salary adjustment will be Y-rated. An <br />employee’s salary will be frozen, and no salary increases will be provided <br />(including no cost of living adjustments) until the employee’s current salary is within <br />the newly established salary range. If an employee is granted a merit increase, the <br />employee will advance one-step in the newly established salary range. <br />• The Economic Development Manager position will be placed in the salary range <br />closest to the current salary range. <br /> <br />A five (5%) percent salary increase effective July 1, 2023. <br /> <br />A three and one-half (3.5%) percent salary increase effective July 1, 2024. <br /> <br />A three and one-half (3.5%) percent salary increase effective July 1, 2025. <br /> <br />A three (3%) percent salary increase effective July 1, 2026. <br /> <br />A five (5%) percent salary increase effective July 1, 2027.