Public-employee pensions are not protected when a city goes belly-up, according to a ruling Wednesday by the judge overseeing Stockton's much-watched federal bankruptcy case. Judge Christopher Klein's few words have re-energized the state's disheartened pension-reform movement – and left the nation's most-powerful pension fund reeling. One can't go a day in Sacramento without hearing about a "historic" piece of legislation or a "groundbreaking" decision, but the Stockton case, as Steven Greenhut notes, could change everything on the pension front. Klein said in the verbal ruling that pensions are just another contract: "Impairing contractual obligations – that's what bankruptcy is all about."
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