Bloomberg News

Bankrupt San Bernardino Withholds $5 Million From Calpers

October 19, 2012

Bankrupt San Bernardino Withholds $5.3 Million Owed to Calpers

California Public Employees’ Retirement System is the largest creditor in bankruptcy cases filed by Stockton and San Bernardino since the end of June, with a total of $290.8 million at stake. Photographer: Max Whittaker/Getty Images

Bankrupt San Bernardino, California, owes the California Public Employees’ Retirement System $5.3 million, of which $1.2 million is delinquent, a spokesman for the largest U.S. public pension fund said.

San Bernardino has failed to make required pension payments to the $245.8 billion pension fund since filing for Chapter 9 protection Aug. 1, a Calpers spokesman, Brad Pacheco, said by e- mail.

Calpers is the largest creditor in bankruptcy cases filed by Stockton and San Bernardino since the end of June, with a total of $290.8 million at stake. The two cities are the largest U.S. municipalities to file for bankruptcy. Stockton has continued to make payments to Calpers.

“These payments are required to be made under California law,” Pacheco said. “If we can’t resolve the missed payments with the city, Calpers will assert its rights and remedies available under the law.”

Stockton and San Bernardino represent 0.7 percent of employer contributions to Calpers, according to actuarial statements.

San Bernardino skipped a $1 million payment on pension obligation bonds issued in 2005, according to a Municipal Securities Rulemaking Board filing Oct. 16.

The city of 209,000 about 60 miles (100 kilometers) east of Los Angeles has been struggling to make payroll for employees and has been forced to withhold payments to some creditors, interim City Manager Andrea Travis-Miller said at a City Council meeting Sept. 17.

City Hall was closed today and Travis-Miller couldn’t be reached for comment. Mayor Patrick Morris didn’t immediately return a phone call seeking comment on the city’s missed payments.

The bankruptcy case is In re San Bernardino, 12-28006, U.S. Bankruptcy Court, Central District of California (Riverside).

Editors:

To contact the reporters on this story: James Nash in Los Angeles at jnash24@bloomberg.net and Michael B. Marois in Sacramento at +1- mmarois@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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