In their efforts to get out of bankruptcy, Stockton may end up reducing payments to retirees.

A Sacramento bankruptcy judge says he's considering cutting Stockton's pensions by up to 60 percent to help with the city's financial reorganization.  

That option is being supported by Franklin Templeton Investments, which loaned $35 million to Stockton and is looking at a payback of only $4 million.  

Meanwhile, the California Public Employees Retirement System lawyers are arguing that Stockton can't reduce its $29 million per year contribution to the fund -- CalPERS has threatened to put a lien on the city assets.

The city put up two golf courses and a park for collateral on the Franklin Templeton loan, and the judge values those properties at $4 million.  

He says the city could also make cash payments totalling that amount instead of giving up the properties.  

An October 1 hearing could end with a ruling on all these issues.