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http://calpensions.com/2010/02/05/ba...-not-pensions/
"The bankrupt city of Vallejo cut health care payments for retired employees, but an initial recovery plan does not touch pensions.
When the old port city on the far side of San Francisco Bay filed a rare municipal bankruptcy in May 2008, there was speculation about whether bankruptcy would become a way for deficit-ridden cities to shed crushing retirement debts.
In groundbreaking actions in the Vallejo case, U.S. Bankruptcy Judge Michael McManus in Sacramento ruled last March that city labor contracts can be overturned in bankruptcy, and then in September dissolved a contract after mediation failed....
Retirement costs are by far Vallejo’s biggest debt. The top two creditors listed by the city in its bankruptcy filing were retiree health, $135 million, and the California Public Employees Retirement Association, $84 million...
Vallejo employees have some of the most generous retirement formulas. Police and firefighters have “3 at 50,” three percent of final pay for each year served when retiring at age 50, capped at 90 percent of final pay.
Most of the other Vallejo employees, “miscellaneous” or non-safety, have “2.7 at 55.” That’s more than the “2 at 55” formula for miscellaneous state workers, which is uncapped and can produce pensions equal to 100 percent of pay after 40 years of service....
Like many California governments, Vallejo has set aside no money to pay for future health care promised retirees. The workout plan would begin switching retiree health from pay-as-you go to prefunding, as recommended by a governor’s commission...
Title: Bankrupt Vallejo cuts retiree health, not pensions"
http://calpensions.com/2010/02/05/ba...-not-pensions/
"The bankrupt city of Vallejo cut health care payments for retired employees, but an initial recovery plan does not touch pensions.
When the old port city on the far side of San Francisco Bay filed a rare municipal bankruptcy in May 2008, there was speculation about whether bankruptcy would become a way for deficit-ridden cities to shed crushing retirement debts.
In groundbreaking actions in the Vallejo case, U.S. Bankruptcy Judge Michael McManus in Sacramento ruled last March that city labor contracts can be overturned in bankruptcy, and then in September dissolved a contract after mediation failed....
Retirement costs are by far Vallejo’s biggest debt. The top two creditors listed by the city in its bankruptcy filing were retiree health, $135 million, and the California Public Employees Retirement Association, $84 million...
Vallejo employees have some of the most generous retirement formulas. Police and firefighters have “3 at 50,” three percent of final pay for each year served when retiring at age 50, capped at 90 percent of final pay.
Most of the other Vallejo employees, “miscellaneous” or non-safety, have “2.7 at 55.” That’s more than the “2 at 55” formula for miscellaneous state workers, which is uncapped and can produce pensions equal to 100 percent of pay after 40 years of service....
Like many California governments, Vallejo has set aside no money to pay for future health care promised retirees. The workout plan would begin switching retiree health from pay-as-you go to prefunding, as recommended by a governor’s commission...
Title: Bankrupt Vallejo cuts retiree health, not pensions"
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