The small California city of Canyon Lake has served notice on the state's pension fund that it wants to quit the plan, Reuters reported today. Canyon Lake's decision to quit the powerful California Public Employees' Retirement System (CalPERS)--America's largest public pension fund with $256 billion of assets under management--could presage much larger problems for the system as it battles with Wall Street bondholders in the bankruptcy cases of California's San Bernardino and Stockton. Canyon Lake, which says it is ready to pay a termination fee, sent a letter on April 4 to CalPERS stating that it wants to end its relationship with the pension fund. A major factor in its decision was a likely move by CalPERS to raise its employer contribution rate by 50 percent in coming years--a decision the fund's board approved yesterday.
