Bankrupt San Bernardino halts payments to CalPERS pension fund
The city of San Bernardino has stopped making payments to CalPERS, the state's public employee pension fund, since filing for Chapter 9 bankruptcy protection Aug. 1.
CalPERS spokeswoman Amy Norris said the city had failed to make $5.3 million in payments, and $1.2 million was considered delinquent.
It is not common for cities to become delinquent on their payments to the pension system, Norris said. The cities of Stockton and Mammoth Lakes, which also filed for bankruptcy this year, have continued to make their payments.
In a statement, CalPERS said it had been working with the city in an attempt to resolve the issue.
"If CalPERS and the City cannot resolve the missed payments, CalPERS will assert its rights and remedies available under applicable law; however, the filing of the bankruptcy case creates a stay of certain actions against the City,” the agency said.
Norris said the delinquent payments would not have any immediate effect on pension payments to retirees, but eventually could if the situation persists.
"Ultimately if payments are not made, they could be terminated and any available assets placed in our terminated pool," she said. "This means no additional contributions would come in, and benefits would be paid from what remained and how that pool is invested. That could possibly impact pensions."
A San Bernardino city spokeswoman could not be immediately reached for comment.
The city filed for bankruptcy protection after learning that its general fund faced a $46 million deficit. Since the filing, city officials have worked to develop a plan to slash costs. Last month, the City Council voted to approve a plan that would cut the city's general fund budget by about one-third.
Proposed cuts to the fire department became a sticking point, but earlier this month, the council passed the final piece of the plan, which would slash $2.9 million from the fire department budget by eliminating vacant positions and reducing engine crews from four to three people.
-- Abby Sewell
Photo: A welcome sign on 6th Street greets visitors in San Bernardino. Credit: Irfan Khan / Los Angeles Times