San Bernardino Misses $5.3M in Pension Payments, CalPERS Says
On Friday, CalPERS said that San Bernardino has withheld $5.3 million worth of pension payments since it filed for bankruptcy in August, the Sacramento Bee reports (Kasler, Sacramento Bee, 10/20).
CalPERS is the largest creditor in bankruptcy cases filed by San Bernardino and Stockton. The cases represent a total of $290.8 million at stake for CalPERS.
According to actuarial statements, the two cities represent 0.7% of employer contributions to CalPERS.
The bankruptcy cases could set a precedent if judges relieve the cities of their pension commitments (California Healthline, 8/21).
Comments on Missed CalPERS Payments
Steve Turner -- president of the San Bernardino Police Officers Association -- said that CalPERS has not stopped providing retirement checks to beneficiaries since San Bernardino halted its regular pension payments to CalPERS.
Turner added, "CalPERS is working with the city ... [and] trying to work out a plan" (Sacramento Bee, 10/20).
Jim Morris -- the San Bernardino mayor's chief of staff -- said the city hopes to develop a restructured payment plan with CalPERS.
He said the missed payments are among the many financial obligations the city has delayed to make payroll and maintain essential services (Cuevas, "KPCC News," KPCC, 10/19).
However, CalPERS spokesperson Brad Pacheco said, "If we can't resolve the missed payments with the city, CalPERS will assert its rights and remedies available under the law."
According to the Bee, one option that CalPERS might consider is to terminate San Bernardino's pension program. In this scenario, the money already contributed by the city would go into a special fund and pension benefits would be allocated based on how well CalPERS could invest the money.
The Bee reports that this option likely would result in retirees receiving fewer benefits than they were promised (Sacramento Bee, 10/20).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.