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Sacramento Bee Reports on the Decisions by Two Cities in Bankruptcy to Remain in CalPERS

November 19, 2014
Sacramento Bee reporter Dale Kasler filed a story on Tuesday examining recent decisions by the cities of Stockton and San Bernardino to pay CalPERS and continue in the retirement system.
 
Although Federal Bankruptcy Court Judge Christopher Klein had previously ruled in the Stockton bankruptcy that cities in bankruptcy can reduce payments to CalPERS, Judge Klein recently confirmed Stockton’s bankruptcy plan that provides for continuing payments in full.
 
“Taken together, Stockton and San Bernardino’s decisions suggest that, even if a judge says it’s legal, severing ties with the powerful California Public Employees’ Retirement System is extremely difficult as a practical matter. If Stockton had reduced payments to CalPERS, it would have triggered a mechanism that would have cut retirement benefits by 60 percent. Stockton officials say employees would have quit in droves.”
 
The full article is available on the Sacramento Bee website.


 
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