Bankrupt San Bernardino withholds $5.3 million CalPERS contribution
By Bloomberg | October 19, 2012 3:39 pm
Bankrupt San Bernardino, Calif., owes CalPERS $5.3 million, of which $1.2 million is delinquent, said Brad Pacheco, spokesman for the state pension fund.
San Bernardino has failed to make required pension payments to the $245.3 billion California Public Employees' Retirement System, Sacramento, since filing for Chapter 9 bankruptcy protection Aug. 1, Mr. Pacheco said by e-mail.
CalPERS is the largest creditor in bankruptcy cases filed by San Bernardino and Stockton, Calif., since the end of June, with a total of $290.8 million at stake. The two cities are the largest U.S. municipalities to file for bankruptcy.
Stockton has continued to make payments to CalPERS.
“These payments are required to be made under California law,” Mr. Pacheco said. “If we can't resolve the missed payments with the city, CalPERS will assert its rights and remedies available under the law.”
The City of San Bernardino could be terminated from the CalPERS pension program and its contributions made to CalPERS until now placed into a special fund, Mr. Pacheco confirmed. The city would no longer make contributions and city employees' pensions would depend on how the special fund is invested.
Stockton and San Bernardino represent 0.7% of employer contributions to CalPERS, according to actuarial statements.
San Bernardino skipped a $1 million payment on pension obligation bonds issued in 2005, according to a Municipal Securities Rulemaking Board filing Oct. 16.
San Bernardino City Hall was closed Friday. Mayor Patrick Morris didn't immediately return a phone call seeking comment on the city's missed payments.
Arleen Jacobius contributed to this story.