Officials in Villa Park are considering pulling the tiny California city from California Public Employees' Retirement System (CalPERS), saying that the monthly costs of the state's giant public pension system are crippling the municipal budget, Reuters reported yesterday. Villa Park fears that pulling out of its contract with the CalPERS could be prohibitively expensive because of a termination fee that could exceed the city's annual budget. CalPERS, America's biggest public pension fund with assets of $300 billion, last provided the city with a hypothetical termination fee of nearly $3.6 million as of June 2012. The city's annual budget is $3.5 million. "Getting out of CalPERS is like getting out of jail," said Rick Barnett, mayor of Villa Park, population 5,800. The city council will vote next month on a resolution to begin the process of quitting CalPERS. Many California cities are chafing at the rising contributions demanded by CalPERS, which administers benefits for more than 3,000 city, state and local agencies, or nearly 3 million people. CalPERS recently voted to raise rates roughly 50 percent over the next seven years, citing its responsibility to maintain the fiscal soundness of the fund.
