CalPERS set to slash pensions for nearly 200 workersCalPERS wrote a letter to the cities in February asking them to make good on the debts LA Works owes to the fund.
“Our view is they have a moral and ethical obligation,” CalPERS General Counsel Matthew Jacobs told the CalPERS board in February. “They’re the folks who put this thing together, and it’s their employees essentially.”
The cities – Azusa, Covina, Glendora and West Covina – say they are not responsible for the debt because the LA Works joint powers authority was created in 1979 as a distinct organization outside of their control.
“While it is regrettable that the consortium has reached this point, its obligations to PERS are not the obligations of the city of West Covina,” wrote Kimberly Hall Barlow, an attorney for the city of West Covina in a Feb. 14 letter responding to CalPERS final request for payment.
The organization that used to be LA Works faces huge bills if it wants to fund completely the pensions of its former workers.
It could pay the $406,000 it owes CalPERS to catch up on its delinquent bills and then revive regular contributions to the pension fund. Or, it could pay a $19.3 million termination fee that CalPERS would invest in a low-risk pool to provide retirement security to the former workers.
Seems the projected returns assumed were too high. If only someone could have seen that coming.
Eight years ago? Wow: