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7.1.A. - Page 2 <br /> strategic interests of the City and the interests of employees. As a result of this <br /> process, we have reached tentative agreements on changes to the existing Memoranda <br /> of Understanding. Substantive economic changes include the following: <br /> Cost of Living Salary Increases <br /> Agreements with each group contain fixed adjustments based on current and <br /> anticipated cost of living increases as follows: <br /> SEIU RCMEA COA* <br /> Year 1 3% 3% 1% <br /> Year 2 2.5% 2.5% 2% <br /> Year 3 2.5% 2.5% 2% <br /> As noted in the Other Economic Changes section below, the members of COA will also <br /> receive a salary range adjustment to address a compaction issue. <br /> Retirement <br /> In 2011, the City negotiated agreements with labor groups to increase employees' share <br /> of pension costs by picking up a portion of the City's rate, in addition to the existing <br /> employee contribution. These agreements resulted in increased contributions of 3.8% to <br /> 7%, depending on the group, over the term of the expiring contracts. The current <br /> agreements negotiated with the groups increase the cost-share for all groups on an <br /> ongoing basis. In addition, consistent with the intent of PEPRA, existing arrangements <br /> with RCMEA and COA for Employer-Paid Member Contributions (EPMC) will be <br /> eliminated over the term of the new agreements. <br /> Over the course of the three-year agreements, employee pension contributions will <br /> increase for COA, RCMEA, and SEIU resulting in the following totals. For comparison <br /> purposes, the recently approved changes to pension cost sharing for the Executive <br /> Managers group are also included. <br /> Standard Employee Total <br /> Employee Share of City Employee <br /> Share Cost Share <br /> Executive Mgmt. 8-9% 12% 20-21% <br /> COA 9% 10% 19% <br /> RCMEA 8% 7% 15% <br /> SEIU 8% 5% 13% <br /> The increases in employees' contributions to pension will be partially offset by salary <br /> increases. However, it is anticipated that the higher contributions under this structural <br /> reform will reduce the City's unfunded liability for pension costs over time, and mitigate <br /> anticipated rate increases in the future. <br />