CalPERS role in preventing Vallejo pension cuts « Calpensions: "Were Vallejo officials pushed away from trying to cut pensions during bankruptcy by fear of a long and costly legal battle with deep-pocketed CalPERS, promised by attorneys representing the giant pension fund?
The bankruptcy of Vallejo, an old port city of 118,000 on San Francisco Bay, was widely watched as a possible way for struggling local governments to cut soaring pension costs.
But when Vallejo emerged from a 31/2-year bankruptcy last November, pensions were untouched. The city actually increased annual payments to CalPERS, reducing pension debt sooner.
Public employee unions, alarmed by Vallejo’s rare move in May 2008, sponsored several versions of legislation making it more difficult for local governments in California to declare bankruptcy under federal law.
