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For the contribution to the state pension system, the pensions have cut by 60% in a town of California by the CalPERS (California Public Employees’ Retirement System). It has been considered the first step of its kind taken by the CalPERS against a city or town. The agency (CalPERS) is responsible of managing pensions for 1.7 million retired and current public employees in the State. Now, the agency announced on 16^th November 2016 to cut 60% pensions and it will affect most workers in the small town Loyalton in the Northern California. The CalPERS indicated that the pension cut was due to the city defaulting on its participation with the pension system of the State as it was dropped out in the month of March 2013.

The officials added, it was experienced that Loyalton was unable to legally withdraw its voluntary termination; the final collection letter was forwarded on 15^th December 2015. But, CalPERS didn’t receive any payment and a final collection letter was again sent in the month of August 2016. The final letter demanded from Loyalton to submit their amount within 30 days or the town will be declared in default. A number of meetings took place with Loyalton officials regarding the issue, but they were still unable to submit any payment. The CalPERS also made at least 50 telephone calls to the officials of Loyalton and forwarded 10 more collection notices. An affected worker John Cussins said that this implementation will drop his pension payments to 1,523 U.S dollars per month. The decision will be implemented from beginning of 2017.