November 28, 2012
External Affairs Branch
Anne Stausboll, Chief Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Amy Norris, Information Officer
CalPERS Seeks to Protect Retirement Security of Members in the City of San Bernardino
SACRAMENTO, CA – The California Public Employees’ Retirement System (CalPERS) filed a motion yesterday with the bankruptcy court seeking relief from the automatic stay that generally precludes legal actions against the debtor City of San Bernardino.
The motion, filed in the U.S. Bankruptcy Court in Riverside, California, requests that CalPERS be allowed to file a collection action in state court and also seek related relief in state court.
“As responsible fiduciaries, we must protect the retirement security of all CalPERS members,” said Anne Stausboll, Chief Executive Officer.“ This legal action would allow us to collect the employer contributions from San Bernardino which are required by State law, to maintain the integrity of the San Bernardino pension plan for its public employees and retirees and to avoid needless procedural disputes and additional legal costs.”
Since commencing its bankruptcy case, the City of San Bernardino has failed to make payments of approximately $6.9 million to CalPERS. San Bernardino’s payments to CalPERS are required by California law.
A city may not operate under the protection of the bankruptcy court without paying its post-petition bills and without complying with State laws, including those governing employee compensation and the State retirement system. Under the provisions of chapter 9 of the bankruptcy code, the bankruptcy court does not have the ability to directly order the City to pay its bills. Such an order may only be issued by a state court.
In October 2012, CalPERS filed an objection to the City of San Bernardino’s eligibility to enter into bankruptcy proceedings.
Currently, CalPERS continues to provide full pension benefits to San Bernardino retirees even after the City has ceased making its payments to CalPERS.
CalPERS, with approximately $241 billion in assets, is the largest public pension fund in the U.S. It administers retirement benefits for more than 1.6 million active and retired California State, public school, and local public agency employees and their families on behalf of more than 3,000 public employers; and health benefits for more than 1.3 million enrollees. The average CalPERS pension benefit is $2,420 per month. The average benefit for those who retired in the fiscal year that ended June 30, 2012, is $3,025 per month. More information about CalPERS is available at www.calpers.ca.gov.