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Furthermore, as noted in the chart, the group agreed to reduce their floating holiday hours from 56 to 32. Floating holidays are similar to regular holidays but the hours are taken on a flexible basis and taken upon approval of the supervisor. The reduction of 24 hours is equivalent to approximately 1% of wages. For comparison purposes, the most recent consumer price index, CPI, which reflects the general cost-of-living increases in the San Francisco-Oakland-San Jose area was approximately 2.4% in February 2013. Benefits: Pension Program: Non-safety employees at the City currently have the retirement plan with the 2.7% @ 55 formula. The Public Employees' Pension Reform Act of 2013 (PEPRA) took effect on January 1, 2013 and requires that new employees, who have not been a member of California Public Employees' Retirement System (CaIPERS) or a reciprocal retirement system, are enrolled in the retirement plan with the maximum benefit factor of 2.5% @ 67 formula. (This was not negotiated as PEPRA is state law.) Retiree Medical Program: In 2011, AFSCME/PCEA agreed to a reduced retiree medical program for its new employees. Instead of medical coverage for two parties after retirement, the new program covers the employee only and ends at the time retirees become Medicare eligible, which is currently at 65 years of age. Consistent with other bargaining units with the reduced retiree medical coverage, AFSCME/F'CEA negotiated a contribution towards a Retirement Health Savings Account (RHSA) for these employees. Upon completion of the probationary period, the City will contribute $35 per pay period and the employee will contribute $12 per pay period towards the employee's RHSA. This vehicle permits employees to contribute, invest and expend funds for medical purposes on a tax-free basis and is consistent with the City's philosophy in having employees participate in paying for their health related programs. Again, this benefit is implemented for new employees who are on the reduced retiree medical program, after they have completed the probationary period. Other changes: Bilingual Program: The parties agreed to implement a bilingual incentive pay program. In such a program the City designates the languages that will most benefit citizens who seek services from the City. The designated languages at this time include Spanish, Chinese (Mandarin) and American Sign Language. The City may modify the designated languages based on the community's needs. Employees will be required to undergo testing and certification by an appropriate institution (often a college) to participate in the incentive program. Once certified, the employee will receive an allowance of $50 per pay period for using their language skills. It is anticipated that, at a maximum, 20 employees will participate in the bilingual program. The bargaining unit also agreed to a one-time payment of $200 per employee (after adoption of the MOU) in exchange for implementing the program later during the term of the contract, in July 2014. Uniform allowances: Employees in the classifications of animal services officer, senior animal services officer and community services officer will be provided with an increase Page 3 of 4