Termination letter sent to biggest U.S. pension fund
The 11,000 person California city of Canyon Lake has served notice on the state's pension fund that it wants to quit the plan, at a time when cities across the state and the United States are looking at ways to rein in soaring retirement costs. Its decision to quit Calpers - America's largest public pension fund with $256 billion of assets under management - could presage much larger problems for the system as it battles with Wall Street bondholders in the bankruptcy cases of California's San Bernardino and Stockton.
Canyon Lake, which says it is ready to pay a termination fee, sent a letter on April 4 to the California Public Employees' Retirement System (Calpers) stating that it wants to end its relationship with the pension fund.
"The problem here is the uncertainty for Calpers, and that is how many cities might opt out," said Michael Sweet. "That is the unknown. The issue here for Calpers is if Canyon Lake becomes a trend."
Originally published on Reuters Online
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