Potential Pension Fallout from Bankruptcy Filings by CitiesCategories: California Developments
The two articles below detail some of the potential pension fallout from the recent bankruptcy filings by California municipalities. According to bond rating firm Moody’s, financially troubled public agencies’ disputes with CalPERS over funding/distribution of retirement benefits may impact other agencies and their creditors as well. Moody’s warned that if payments to CalPERS are delayed or reduced it could incentivize other agencies to seek concessions. These battles could allow courts to decide in the future whether pension payments can be modified in a financially distress local governments.
Bankruptcy filings by California cities may rein in pensions
Sacramento Bee, by Dan Walters, Published Monday, Nov. 5, 2012 – 12:00 am | Page 3A
As financially troubled cities suspend their payments to California’s pension fund, federal bankruptcy judges may have the final word on the long-assumed inviolability of retirement benefits. Read the full article here…
Cities’ disputes with CalPERS have ramifications, Moody’s says
Los Angeles Times, by Abby Sewell, Published November 4, 2012
San Bernardino’s and Compton’s disputes with CalPERS, the state’s public employee pension fund, could have ramifications for other cities and their creditors, credit rating firm Moody’s said in a new report. Read the full article here…