The California Public Employees’ Retirement System (CalPERS) has reached an “interim agreement” with the bankrupt city of San Bernardino, California, to reclaim deferred debt payments of $16.5 million.
San Bernardino first deferred its employer contributions to the CalPERS pension in December 2012, four months after the city filed for Chapter 9 bankruptcy with a budget shortfall of roughly $46 million.
In a report into the bankruptcy published on June 19, attorneys acting for the city said it had “reached an interim agreement” with CalPERS to “make certain payments… on deferred amounts owing”.
While the details of the payments have been kept confidential, a spokesperson for CalPERS said the principal amount outstanding was $13.5 million, but this figure does not include interest, late fees, penalties, or other costs.
The spokesperson added: “The city and CalPERS have been participating in ongoing confidential mediation ordered by the bankruptcy court, and working with the court-appointed mediator, the parties have engaged in extensive negotiations and have made significant progress.”
Reuters reported that CalPERS continues to oppose the decision of San Bernardino to file for bankruptcy. The pension has previously voiced opposition to the bankruptcy of Detroit, Michigan.
Related links: CalPERS: Detroit Ruling Threatens All US Public Pensions & What It Takes to Be CalPERS CIO