STOCKTON (CBS13) — Government workers are searching through their pension documents after a landmark decision by a federal judge that dealt a blow to the California Public Employees Retirement System.
A federal bankruptcy judge ruled Wednesday that Stockton’s pension issues were no different than its other bills, leaving the door open for the city to slash payments once thought protected.
“If they are allowed to take up to 60 percent of our retirement, I don’t know how I’ll make it,” says Charlotte Martin. “I think I clear $2200 a month. If they take 60 percent of that, thats a lot.”
Martin spent 19 years working as an internal auditor for the city of Stockton before retiring. But now she worries she won’t be able to pay her mortgage or everyday bills. This after a judge ruled Stockton’s contract with CalPERS can be broken in order to pay off its debt to creditors.
“All I know is if I had been under Social Security, they couldn’t have touched that money, no way,” she said. “But because the city made a decision prior to my coming to work, I had no choice in it.”
If Stockton doesn’t continue to pay CalPERS in full, or chooses to pay $1.6 billion to end its contract, CalPERS could cut could cut pension benefits by up to 60 percent.
If the city acted in either way, a number of current Stockton employees could decide to leave their jobs and work elsewhere.
“The retirees, as far as I’m concerned, had no direct involvement in the decisions made by the city,” retired Stockton Police officer Tony Delgado said. “Those decisions ultimately resulted in the insolvency of the city, which has directly affected us and our financial well being for pretty much the rest of our lives.”
The judge has yet to make a final ruling, but Martin says the way things have gone so far, his retirement that she worked almost two decades for is in jeopardy.
“There aren’t a lot of jobs out there as it is, and they aren’t going to hire older people,” she said.
Stockton Mayor Anthony Silva says the city has an adjustment plan it will present to the court at the end of the month.
Silva says the city is also still open to talking with complaining creditor Franklin Templeton Investments to reach a compromise.