Bond insurer Assured Guaranty, facing massive losses in Stockton, Calif.'s bankruptcy, said that the largest U.S. public pension fund, Calpers, was getting preferential treatment among creditors, Reuters reported yesterday. That may set the stage for a fight over whether cities in dire circumstances legally have the ability to change obligations under pension plan benefits agreed to in much better times. Calpers, the California Public Employees' Retirement System, so far has said that the cities don't have that ability. A Stockton proposal to creditors in May, which was made before chapter 9 proceedings began, showed the city was ready to fully pay pension fund payments but largely abandon payments on $121 million of pension obligation bonds backed by Assured Guaranty.
