CalPERS is facing another challenge from bankrupt San Bernardino, which says it wants to renegotiate its debts to the big pension fund.
In a sweeping budget plan released Monday, the city says it wants to "negotiate repayment over time" the millions it owes the California Public Employees' Retirement System.
San Bernardino already halted its payments to CalPERS after filing for Chapter 9 municipal bankruptcy in August. The city is more than $5 million behind on its payments to the giant pension fund.
CalPERS responded a month ago by formally challenging the city's right to file for bankruptcy, saying San Bernardino is improperly using the Chapter 9 laws to dodge its financial obligations.
Unlike bankrupt Stockton, which is continuing to pay CalPERS, San Bernardino has said it simply can't afford its current obligations to the pension fund.
The latest move by San Bernardino suggests the city and the pension plan are a long way from resolving their differences.
When asked about the city's proposal, CalPERS spokesman Brad Pacheco said, "If the city proposes a plan that does not include the resumption of payments to CalPERS, the system will take appropriate action to protect the pension plan." Eventually, CalPERS could terminate San Bernardino's pensions, a move that would likely reduce benefits to the city's retirees.
The city's new budget plan, called a "pendency plan," is an attempt to close a $45.8 million deficit for the current fiscal year. San Bernardino also proposes making cuts in city payroll, including the elimination of vacancies in the police department.
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