Officials of Pacific Grove, Calif., say they believe that overbilling by state pension system CalPERS has pushed municipal debt up to unsustainable levels, and they have hired a bankruptcy attorney to explore ways to lower payments to the system, Reuters reported yesterday. Municipal bankruptcy experts said that other cash-strapped California cities and towns will be watching Pacific Grove, a coastal city of 15,000 south of San Francisco, to see how it resolves its issues with the California Public Employees' Pension Fund (CalPERS), the largest U.S. pension system. CalPERS, which manages $254 billion in assets, said that it will provide the additional information Pacific Grove has asked for by April 15. But the pension fund also said that it has calculated city pension payments carefully and provided Pacific Grove with detailed calculations and accounting methods in yearly reports.
