Police union members have agreed to a concessions deal that will initiate a two-tiered retirement system and continue the givebacks that police officers agreed to last year.

The deal, which will require police officers to forego roughly one-tenth of their wages, negates the threat of police officer furloughs.

"It all works out to a 10-percent deal," said Rich Lawhead, president of the San Bernardino Police Officers Association. "We see it as a little more than 10 percent. They see it as 10 percent."

Mayor Pat Morris and City Manager Charles McNeely both expressed gratitude to city police officers.

"It shows their willingness to work with the city," McNeely said. "They understand the situation we're in."

As a whole, the two-year concessions deal could lead to about $2.7 million in savings during Fiscal 2010-11 and the next budget year.

San Bernardino's current budget is an attempt to solve a $24 million deficit. Officials assumed the police union would make concessions while drafting the budget.

In terms of officers' pay, the deal calls for union members pick up $400 in monthly medical costs and to forego a $950 per year uniform allowance.

The retirement changes are not expected to result in immediate. Morris, however, said the old pension system was unsustainable and heralded the new two-tiered retirements as a major development.

"This is a critical first step in a series of tough decisions that we must make as a city as we restrict our city's finances," the mayor said.

The retirement changes will require future San Bernardino police officers to work longer before they can max out their pension benefits.

The "3 at 50" formula, which current officers work under, allows an officer with thirty years of service to retire on 90 percent of their highest earnings upon reaching the age of 50.

The new "3 at 55" retirement plan will be given to future hires if the City Council ratifies the deal.

The council is scheduled to vote on the concessions during its Monday meeting.