CalPERS

Fitzgerald Needs a Course in Fact-checking

June 24, 2014

Once again in his rants against CalPERS, blogger Michael Fitzgerald has not bothered to fact check his points, Stockton Record, “CalPERS legbreaker recovery method”, June 23, 2014. In addition, Fitzgerald’s simplification of complicated legal proceedings are misleading and equally inaccurate.

CalPERS did not try to sue San Bernardino for pension payments, CalPERS sought relief from the Bankruptcy Court to bring a collection action in state court to collect amounts owing. These amounts were postpetition administrative expenses, as distinguished from prepetition claims. CalPERS position was that a debtor in bankruptcy must stay current on its postpetition claims, a vanilla concept in bankruptcy. CalPERS did not ever take the position that it had “special status” over all other creditors.

CalPERS did not contest San Bernardino’s eligibility for bankruptcy on grounds of insolvency, it contested on grounds that the City did not meet the statutory requirements pertaining to desire to effectuate a plan of adjustment and good faith in its filing.

CalPERS did not file a brief in support of a state attempt to block the city from receiving $15 million in desperately needed tax revenue. The state threatened to withhold tax revenue from the Successor Agency, not the City. They are two distinct legal entities, and the Successor Agency is not in bankruptcy. The Bankruptcy Court dismissed the City’s complaint because it did not allege harm to the City. 

CalPERS administers pensions according to state law. The law requires CalPERS to collect full contributions from participating agencies in order to protect our members' pension security.

We work for our members and we will continue to uphold our fiduciary duty to guarantee our members receive the public pensions that were bargained with their employer and promised. No amount of ranting from reporters will dissuade us from our mission.

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Dated: 06-24-2014