San Bernardino’s approach to CalPERS in its bankruptcy has differed from other cities that have filed for Chapter 9 bankruptcy, because they have stopped paying CalPERS.
Despite its bankruptcy, Vallejo continued to pay its pension obligations to the pension giant. Stockton didn’t even list it as a creditor, despite CalPERS being the single largest holder of debt obligations. This puts San Bernardino in a league of its own.
But when a fiscal emergency was declared, they did so in the face of insolvency. And if the city is truly fighting off insolvency, that means that the millions intended to go to CalPERS must be withheld reallocated.
Currently, the City owes CalPERS $5.3 million, but because of grace periods, they are only delinquent about $1.2 million. If their contributions are not brought current, the City could find its account frozen and its relationship with CalPERS effectively end. No more money could go into the fund.
Read the full story at KPCC Southern California Radio.