January 30, 2013
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
CalPERS Issues Statement on City of Stockton Court Ruling
SACRAMENTO, CA – The California Public Employees' Retirement System (CalPERS) issued the following statement today after U.S. Bankruptcy Judge Christopher Klein ruled from the bench that the City of Stockton does not need permission from the bankruptcy court to settle and pay its disputed claims.
"CalPERS is extremely pleased with Judge Klein's ruling today," said Robert Udall Glazier, Deputy Executive Officer for External Affairs. "The Judge clearly distinguished Chapter 9 municipal bankruptcy proceedings from other bankruptcy proceedings."
"Contrary to what the bond insurers argued, the Judge recognized that Section 904 of the Bankruptcy Code places limitations on the powers of the bankruptcy court over public entities like Stockton. This is a victory for Stockton as it continues to make the difficult decisions needed to restore its financial and economic health.
"CalPERS applauds the decision, which would allow the elected leaders in Stockton to continue to make the smart business decisions needed to protect its citizens and the valued public employees who serve them every day," added Glazier.
CalPERS had filed a brief with the court in support of the City of Stockton, while bond insurers had opposed Stockton's efforts and instead tried to force the City to obtain bankruptcy court approval of all claims before they could be paid. The creditors were effectively seeking court intervention in the routine operating activities of the City.
CalPERS is the largest public pension fund in the U.S. with assets totaling $251 billion. It administers retirement benefits for more than 1.6 million California State, local government, and public school employees, retirees, 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 most recent fiscal year that ended June 30, 2012, is $3,025 per month.