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• • Town of Los Altos Hills Classification and Compensation Plan SECTION 5 RETIREMENT 5.1 Tier 1 -Pension 5.1.1 General Description The Town's retirement program provides employees with benefits through their retirement years in an amount which is based upon years of service, age of employee at the beginning of their retirement and the three highest years' compensation during their tenure. 5.1.2 Eligibility All regular, full-time and part-time employees who work twenty (20) hours per week or more are members of the California Public Employees Retirement System (Ca1PERS) hired prior to August 31. 2011. Temporary employees may also enroll in the Ca1PERS program, but must pay the employee's portion of the retirement contribution. 5.1.3 Benefit The Town contributes an employer share-of retirement contribution based on the gross salary for each eligible employee, and also pays the employee's share of the retirement contribution. The employee's share is equal to 7%of their yearly gross salary. No deduction is made from an employee's earnings for this retirement benefit, unless a temporary employee elects to participate in the PERS program. In that case, the employee would make their own contribution to the plan,. Employees of the Town eligible for this benefit do not pay into the Social Security system. The Town's contract with Ca1PERS provides service retirement benefits under the "2% at 55" formula. The formula uses a multiplier of x %, times the number of years of service, to determine retirement benefits at a given age. For example, under the 2% at 55 formula, a retiree with 10 years of service retiring at age 55 would receive an annual retirement benefit of 20% of his/her final (adjusted) annual salary. The earliest retirement date is age 50, with at least 5 years of service. The table below shows the"benefit factor", or multiplier for the 2%at 55 plan. 13 Proposed July 21,2011 Resolution No.41-11 Page 14