CalPERS must be shuddering at Detroit judge’s words
The California Public Employees Retirement System (CalPERS) has no doubt been watching the Detroit bankruptcy proceedings closely, and it cannot be pleased by what the judge ruled. Yes, Detroit can cut its pension plans. According to the Sacramento Bee, “The ruling by U.S. Bankruptcy Judge Steven Rhodes could help bankrupt San Bernardino in a potential legal showdown with CalPERS over the sanctity of employee pensions. According to the Detroit News, the judge said pensions are essentially the same as any other contract, and ‘it has long been understood that bankruptcy law entails the impairment of contracts.’” CalPERS contends that pensions are sacred and cannot be touched no matter what — as opposed to everything else, which can be slashed and burned after a city spends itself into despair. It’s only a matter of time before the courts see it more rationally. Figures that the good news comes from outside California.