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CalPERS Calls Detroit Bankruptcy Ruling "Short-Sighted"

The California Public Employees’ Retirement System (CalPERS) today issued a following statement in response to a ruling in the City of Detroit bankruptcy eligibility...

The California Public Employees’ Retirement System (CalPERS) today issued the following statement in response to a ruling in the City of Detroit bankruptcy eligibility:

"The Detroit court failed to recognize the difference between a two party contract and the unique nature of a state public employee retirement system, which creates a three-way relationship among a public agency, its employees and the retirement system. In California, our members’ vested rights to their pensions are protected by the California constitution, statutes and case law.

"Unlike Detroit, CalPERS is not a city pension plan. CalPERS is an arm of the state and was formed to carry out the state’s policy regarding public employees. The Bankruptcy Code is clear that a federal bankruptcy court may not interfere in the relationship between a state and its municipalities. The ruling in Detroit is not applicable to state public employee pension systems like CalPERS.

"The ruling is short-sighted and does not take into account the promises made in exchange for the financial and physical investments that public employees and retirees make in our communities.

"CalPERS will continue to protect and champion the public employees and retirees who serve California every day."

Next Finance , December 2013

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