The California Public Employees’ Retirement System, the nation’s largest public pension, makes frequent appearances in Legal affiliate The Am Law Litigation Daily as a lead plaintiff in securities class actions. But late Tuesday, CalPERS made an unprecedented move in a very different venue: the municipal bankruptcy of San Bernardino, Calif. In an 11-page filing, CalPERS’ lawyers at K&L Gates asked a federal bankruptcy judge in Riverside, Calif., for permission to sue San Bernardino for falling behind its contributions for municipal employee benefits. News of the filing was first reported by Reuters.
San Bernardino, a city of about 200,000 that sits a few miles east of Los Angeles, has been deferring its pension payments to CalPERS since just before it entered Chapter 9 bankruptcy proceedings in August. According to CalPERS, the city owes $5.9 million in back payments under California labor laws. “By failing to timely make the required contributions, the city is undermining the actuarial soundness of the pension plan and threatening its employees’ ability to obtain their vested contractual right to pension benefits,” the K&L Gates lawyers wrote in Tuesday’s brief.
