In the past, the city carried the total cost sent to the California Public Employees' Retirement System, known as CalPERS, but is gradually moving toward a point where all city employees must cover the required member contribution, which is 9% for safety employees and 7% for non-safety employees, City Manager Dave Kiff said.
"When times were fat and happy, in order to recruit the best employees possible, we paid their share," Kiff said.
In September, Newport Beach reported an $8-million deficit.
However, through various reductions in spending and adjustments to retirement plans, the city has reduced the deficit to $1 million, he said.
The 3.5% diverted from lifeguard salaries, effective from Feb. 27, is expected to contribute $90,000 of the average $6 million the city pays annually to CalPERS.
City firefighters are already paying 3.5% member contributions and other non-safety employees are paying 3.2%, Kiff said.
"I really have to give [the association] credit, they really stepped forward to say that they can help," Kiff said. "And this is an important way to address the city's budget problem."
Also included in the new contract under the association's proposed memorandum of understanding is an increase in tuition reimbursement for education programs. Salaries and staffing are expected to remain unchanged.
"The [tuition reimbursement] could be very beneficial," Jacobsen said. "While many of us have our degrees, or advanced degrees, I always try to encourage all of our younger members to take advantage of it and get the education."
The meeting begins 7 p.m. Tuesday at City Hall, 3300 Newport Blvd.
