Stockton Says It is Not Affected by CalPERS New Assumptions, but Market has DoubtsMarch 12, 2014 – In The News
Michael Sweet was quoted in the Debtwire article "Stockton Says It is Not Affected by CalPERS New Assumptions, but Market has Doubts." While the full text can be found in the March 12, 2014, issue of Debtwire, a synopsis is noted below.
The city of Stockton says it will not be overwhelmed by the new assumptions approved by the California Public Employees Retirement System (CalPERS), which will raise pension costs for California cities.
But attorneys and financial analysts caution that the increased pension costs are likely to affect progress in the city’s Chapter 9 bankruptcy case and the approval of its plan of debt adjustment.
The progress of the San Bernardino, which has been in bankruptcy since August 2013, will likely influence Stockton’s Chapter 9 proceedings, said Michael Sweet.
In this context, CalPERS new assumptions have a positive effect: they give a more honest and transparent account to cities about what their future pension costs will be, Sweet said. And they essentially tell these cities that they need to budget around the new cost, rather than just ignoring it, he said.