(Bloomberg) — California's public retirement fund holds so much power over local officials that pension bond investors can't expect equal treatment when a city goes bankrupt, a judge said in a ruling that she acknowledged seems "unfair."
U.S. Bankruptcy Judge Meredith Jury on Monday threw out a lawsuit in which investors had claimed their pension bonds must be paid off at the same rate as the California Public Employees' Retirement System in a municipal bankruptcy. The $304 billion fund is the biggest in the country.
Jury acknowledged that her decision could discourage investors from buying pension-obligation bonds in the future.
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