Calpers Seeks to Sue San Bernardino Over Pension Payments

http://www.bloomberg.com/news/2012-11-28/calpers-seeks-to-sue-san-bernardino-over-missed-pension-payments.html

"The California Public Employees’ Retirement System is seeking to sue bankrupt San Bernardino over missed pension payments, the second potentially precedent- setting fight the fund picked with a California city this year.
San Bernardino can’t use U.S. bankruptcy law to justify its failure to make at least $5 million in payments, Calpers, the biggest U.S. public-employee pension fund, said in court papers filed Nov. 27. The motion relies on arguments the fund is also making in the bankruptcy of Stockton, California, and may be a warning to other cities struggling with high pension costs, said James E. Spiotto, a bankruptcy attorney and partner at Chapman & Cutler LLP in Chicago."

San Bernardino is broke. It took out bonds for many things including to pay for the pensions of their workers. CALPERS runs the pensions for the workers and San Bernardino wants to get out from the money it owes CALPERS through Bankruptcy.

This is going to be interesting. Services now v. past pension obligations.