CalPERS claims the city of San Bernardino owes the fund more than $5 million.
San Bernardino filed for bankruptcy in August due to a $46 million budget shortfall. CalPERS wants a court to stop the bankruptcy filing and require San Bernardino to pay its debt.
"Due to the City's current cash flow deficit, it has been necessary to defer payment of some obligations to allow the city to keep providing the most basic and critical services to the community," Interim City Manager Andrea Travis-Miller said in a news release Tuesday.
The first deferral was made on July 31. The city continues to make the payment for the employee portion and only the employer portion was deferred.
Travis-Miller says the city has discussed its deficit cash flow problem with CalPERS representatives and no formal action has been taken to terminate the city's contract. She says the city plans to address the issue in the City's Pendency Plan expected to be presented to the City Council in the next few weeks.
The Associated Press contributed to this report.