Today I have a pair of recent articles to present. The first is entitled Californian’s $609,000 Check Shows True Retirement Cost.
That article is part of a stunning six-part series by authors Michael B. Marois and Rodney Yap. I encourage you to click on the link and read the entire piece.
Also consider Calpers Bankruptcy Strategy Pits Retirees vs. All Others.
The California Public Employees’ Retirement System is trying to rewrite the rules for bankrupt cities, claiming that it should get paid before almost everyone else, including bondholders.Blatant Lies By Calpers
The biggest U.S. public pension fund would set a legal precedent should courts adopt Calpers’s position that, as an arm of the state, it is exempt from rules that apply to other creditors in the Chapter 9 bankruptcy cases of San Bernardino and Stockton. A Calpers victory would threaten public services in a city trying to reorganize in bankruptcy, or in an extreme case, cause a city to disincorporate, attorney James E. Spiotto said in an interview.
“Chapter 9 was never intended to cause the liquidation of a municipality or the reduction of services,” said Spiotto, who isn’t involved in the San Bernardino and Stockton cases. “What Calpers is doing is threatening the basic tenet of Chapter 9.”
Pension costs for retired public employees are straining local governments from California to Rhode Island. In Southern California, San Bernardino says it is so strapped for cash it must put off $13 million in payments to Calpers or risk public safety. About 400 miles (644 kilometers) north, creditors of Stockton are fighting Calpers in court as well, arguing that the pension fund shouldn’t be given preferential treatment and urging the city to take an aggressive stance in negotiations.
San Bernardino will battle Calpers in a federal court in Riverside, California, on Dec. 21 over two related legal issues: whether Calpers can sue the city to force it to make about $7 million in missed payments and whether the city should be kicked out of bankruptcy.
Calpers blames elected officials for San Bernardino’s financial problems, saying in an e-mail that they made “irresponsible and short-sighted” decisions. Cutting back on what the city owes employees would make it hard to recruit qualified workers, Calpers spokesman Robert Glazier said.
Just listen to those pathetic lies by Glazier. California would be flooded with qualified people for every position if it could put contracts out for competitive bids outside of collective bargaining contracts.
Taxpayers have to pay through the nose because corrupt California politicians are in bed with corrupt administrators and corrupt union officials.
California, Illinois Completely Dysfunctional
California and Illinois are uniquely, and completely dysfunctional with the most union corruption and the worst funded public pension plans in the nation.
Bankruptcy is the only way to fix the problem, unless of course some corrupt judge protecting his own public pension rules in Calpers' favor.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
