May 1, 2014

External Affairs Branch
(916) 795-3991
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
newsroom@calpers.ca.gov

SACRAMENTO, CA - The California Public Employees’ Retirement System (CalPERS) today filed an amicus (friend of the court) brief related to the City of Detroit Bankruptcy case supporting appeals by the Committee of Retirees of the City of Detroit and others over the decision that Detroit is eligible for bankruptcy.

In its filing in the U.S. Court of Appeals for the Sixth Circuit, CalPERS argues that the decision of the bankruptcy court is incorrect in saying that once a state authorizes its subdivisions to file bankruptcy, the state’s laws and constitution no longer control the actions of the municipal debtor.

CalPERS further argues that:

  • This portion of the bankruptcy court’s decision was not necessary for the court to reach its decision that Detroit was eligible and therefore the decision is an improper advisory opinion.
  • The decision nullifies section 903 of the Bankruptcy Code which expressly preserves state laws governing municipalities notwithstanding bankruptcy; and
  • The bankruptcy court improperly created a presumption in favor of eligibility which is not appropriate in the context of a chapter 9 bankruptcy.
  • In addition, the brief distinguishes state administered systems such as CalPERS from city administered systems such as Detroit's and asks the court of appeal to confine its decision to the latter.

Read the filing (PDF, 2.28 MB).

CalPERS is the largest public pension fund in the U.S., with more than $285 billion in assets. CalPERS administers health and retirement benefits on behalf of 3,064 public school, local agency and state employers. There are more than 1.6 million members in the CalPERS retirement system and more than 1.3 million in its health plans. For more information about CalPERS, visit www.CalPERS.ca.gov.

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