CalPERS has filed suit against the city of Compton, Calif., charging it failed to make required pension payments of almost $2.7 million for retirement and health benefits.
The $245.3 billion California Public Employees' Retirement System, Sacramento, disclosed this week that it is asking the court to order Compton to make $1.99 million in pension contributions and $674,000 in health benefit contributions for Compton city employees. The suit was filed last month in Superior Court in Sacramento County.
The pension fund has not received a payment from Compton since Sept. 21, CalPERS spokesman Brad Pacheco said in an e-mail
The city plans to make the payments by the end of the year, said Harold Duffey, Compton's city manager, in an interview.
“We explained to CalPERS that it was a cash flow problem,” Mr. Duffey said.
Mr. Duffey said Compton has a 0.5% tax on all real estate parcels in the city to fund retirement and health benefits. But he said the payments are collected by the County of Los Angeles and the city does not begin receiving them until December.
”I think the issue is that CalPERS is getting skittish,” Mr. Duffey said. “There were rumors the city was going to file for bankruptcy.”
Mr. Duffey said the city does not have any bankruptcy plans.
Mr. Pacheco said in his e-mail that payments are required to be made under California law and Compton had not paid. “We are prepared to assert our rights available under law to protect the fund and our members,” he said.
The Compton dispute comes as CalPERS is involved in another legal tangle with the city of San Bernardino over its pension contributions.
CalPERS filed an objection Oct. 24 in federal bankruptcy court to the city's eligibility to seek bankruptcy protection.
San Bernardino officials had indicated in pre-bankruptcy plans that it plans to make payments to CalPERS, but owes the retirement system about $5.3 million. In a statement Monday night, city spokeswoman Gwendolyn Waters said officials are working to correct San Bernardino's cash flow deficit and pay CalPERS.