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California City Abandons Sinking Pension Fund


Canyon Lake, a small gated city in Southern California, has just announced plans to withdraw from Calpers. The move comes in response to the pension fund’s recent suggestion that cities kick in as much as 50 percent more to the fund to keep benefits secure. Calpers requires a “termination fee” for any municipality looking to exit, but the city apparently thinks paying that fee now offers a better deal than a future of contribution hikes with Calpers.

Calpers already has its hands full with rebellious cities. The fund has been embroiled in a long fight with San Bernardino, which is looking to delay payments as it goes through bankruptcy. But Canyon Lake is the only city so far that has decided to leave the fund entirely, and it’s not yet clear how Calpers will react to this move. It’s not that Calpers is afraid of the city’s departure on its own. Canyon Lake is an extremely small city, with only two full time employee. But if other, larger cities follow Canyon Lake’s lead, Calpers will have a serious problem on its hands.

[Aaron Kohr /]

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  • Mysticbeetle

    Smart city administrator, probably unpaid too. I quit the stock market casino 6 months ago, kept acopy of the porfolio, it’s down, on paper’ 36%. He who gets out first, might get out with a few bucks of principal.

    • BooMushroom

      “He who panics first, panics best.”

  • Denny

    Just waiting for Calpers to jack the fee up to $1 trillion! There will be no escape.

  • SkippingDog

    Canyon Lake has two (2) employees and has done nothing more than give CalPERS a notice of intent to terminate their contract. They have no real idea of how much that will cost, so it remains to be seen whether this is a prudent or even feasible financial decision for the city.

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