CalPERS and San Bernardino aren’t seeing eye-to-eye these days, with their ongoing disagreements most recently manifesting itself in a lawsuit where CalPERS accused the city of criminal activity and slammed its bankruptcy plan as no plan at all.

CalPERS is taking its aggressive stance because San Bernardino is the first city to deliberately stopping payments to the fund. Since declaring bankruptcy, the city has ceased making its bi-weekly payments and now owes the pension giant about $8 million. For the City, paying that sum would mean no longer being able to make payroll. For CalPERS, the $8 million represents about .00329% of its total portfolio.

The danger to CalPERS is greater than just San Bernardino. Should the pension giant cease to be treated differently than other creditors by cities in distress, it could open the door to further cities withholding payments.

CalPERS, in a lawsuits, says that the City’s bankruptcy plan doesn’t represent a plan at all, and instead is just a delaying tactic being used by a city that chose to ignore its financial difficulties for more than a decade.

Other creditors have taken the side of the City in the matter, saying that CalPERS should be treated no different than any other creditor.

Read the full story at the San Bernardino Sun.