Calpers Defends Pension Benefits While Risking Losses

The California Public Employees’ Retirement System, the largest U.S. pension, is defending government workers against criticism of their benefits even while it risks losses as municipalities, faced with rising retirement costs, file for bankruptcy, Bloomberg reports  The $239.1 billion fund is the largest creditor in bankruptcy cases filed by two California cities, Stockton and San Bernardino, since the end of June, with a total of $290.8 million at stake.

Increasing retiree obligations are straining budgets of cities across the Golden State, still grappling with income- and sales-tax revenue reduced by the longest recession since the Great Depression. The two bankrupt cities represent 0.7 percent of employer contributions to Calpers, according to actuarial statements. Still, others may follow if judges relieve them of pension commitments, said Karol Denniston, a bankruptcy lawyer at Schiff Hardin LLP based in San Francisco….

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