When Stockton, California, filed for bankruptcy last year, the stage was set for a precedent-setting battle with Wall Street over whether bondholders or retired public employees should pay the price when a local government goes broke.
But under the terms of recent settlements, bond insurers who are backing about $240 million in city debt will accept a “haircut” of as much as 50 percent on some bonds. Retirees will keep their full pensions, though 1,100 of them will lose their retiree health insurance.read more...
The mayor of California’s third largest city offered a plan on Tuesday to help the state rein in spending on public pensions, drawing rebukes from a group representing public employees as well as the state’s pension fund for public-sector workers.
San Jose Mayor Chuck Reed said his measure, which he hopes to qualify for the November 2014 ballot, would urge voters to amend California’s constitution to allow local governments to reduce pension expenses associated with their current employees.read more...
Retired Sacramento County employees have no legal right to unending health care subsidies from the county, a federal judge has ruled.
The Sacramento County Retired Employees Association and six individuals sued the county in 2011 on behalf of four categories of retirees, challenging the decision to reduce or terminate subsidies that help pay for medical and dental care.read more...
Federal officials cut off $54 million for Sacramento Regional Transit on Wednesday, prompting Gov. Jerry Brown to announce a pension-law compromise intended to keep the money flowing to transit agencies on the verge of losing grant funds.
With a series of similar U.S. Department of Labor rulings likely that would have disrupted $1.6 billion in grants statewide for this year alone, Brown’s office said the governor supports Assembly Bill 1222…read more...
The California Public Employees’ Retirement System — right up the road from us in Sacramento — has won international acclaim as an investor — for better or worse. Part of what puts CalPERS on everyone’s map is its sheer size at about $260 billion of managed assets. Another part of the picture is that it has always been willing to pay up for careful management of those megabillions — and its transparency about all the moves it makes is truly exemplary…read more...