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Cities may use bankruptcy to cut worker pensions
Cities may use bankruptcy to cut worker pensions

Financially pressed California cities might turn to bankruptcy as a way to cut their increasing pension costs after a judge's ruling, experts said Thursday. Analysts from Moody's Investor Services, a bond rating firm, said that Wednesday's ruling by a federal judge considering Stockton's bankruptcy case could open the door for cities to cut retirement obligations — once considered sacrosanct. In that ruling, Judge Christopher Klein said cities could walk away from their pension obligations — just as they can from other debts. The ruling was lambasted by the California Public Employees' Retirement System, which provides pension benefits to 1.7 million...