San Bernardino, Compton stop paying CalPERS « Calpensions

San Bernardino, Compton stop paying CalPERS « Calpensions

CalPERS filed court actions against two financially troubled cities, San Bernardino and Compton, after they stopped making legally required payments to the big pension fund, a rare default not made in the Stockton and Vallejo bankruptcies.
For financially struggling local governments, an unauthorized halt or delay in payments to the pension fund is not something CalPERS wants to become widely viewed as a workable option.
CalPERS can offer some relief in hardship cases. But stretching out payments is limited aid for a deeply distressed local government, hit by falling tax revenue in a down economy and, in some cases, years of alleged overspending and mismanagement.
San Bernardino has skipped more than $5.3 million in pension payments to CalPERS since filing for bankruptcy on Aug. 1. Last week CalPERS urged a federal bankruptcy court in Riverside to delay action on the city’s eligibility for bankruptcy.