LIVERMORE -- City leaders have completed negotiations with their largest employee group for a contract that will have all city staff paying a portion of their retirement costs by 2013.

The Livermore City Council voted 4-0 Tuesday, with Councilmember Doug Horner absent, to approve a new two-year contract with the Municipal Employees' Agency for Negotiations. By the end of the contract, members will paying 8 percent of their base pay toward their CalPERS retirement.

The pension changes will save the city just under $317,000 over the duration of the contract. Municipal Employees Agency for Negotiations has 244 members and includes maintenance workers to office staff to engineers.

Union members began paying 5 percent toward their retirement in 2009.

The new contract also includes a 1.5 percent pay raise for all employees, effective Jan. 14, and an increase in what the city pays toward the employees' health insurance premiums.

The contract also includes a two-tiered system for new hires that allows them to retire at age 60 and receive 2 percent of their pay for every year of service. Current employees can retire at 55 with 2.7 percent of their pay for each year worked.

Livermore also completed contract negotiations with its police union and fire union, which it shares with Pleasanton, this year. The police contract will have officers paying 5 percent of the 9 percent of the employee share toward CalPERS. The fire contract

The three contracts approved this year will save the city roughly $1.7 million over the life of the contracts. The city is working on its police management contract.

Contact Robert Jordan at 925-847-2184. Follow him at Twitter.com/robjordan127.