Christmas is coming a little early for certain New Yorkers, thanks to your taxes.
Once again, the state is handing out cash bonuses of $12,000 each to thousands of police officers and firefighters who don’t even work for the city anymore, according to the Citizens Budget Commission.
The bonuses, known technically as the Variable Supplement Fund, are given to folks from the NYPD and FDNY who have retired and earned a pension. Officers who reached pension age but didn’t retire are also eligible. Those who got the lucrative disability pensions, however, are not eligible.
In the past 8 years, the amount the pension fund is paying for these bonuses has jumped by 152 percent — from $164 million in 2001 to $414 million this year.
Why is that? Well…
…the VSFs used to be determined by how well the stocks in the pension fund did. But that was changed a long time ago, meaning that the VSF isn’t variable at all. It’s a fixed number. In addition, a cost-of-living adjustment added in 2000 used to count against the VSF number. But the state Legislature eliminated that in 2006.
Making matters worse, the economic meltdown cut pension fund assets in half since 2007, meaning that the city may eventually have to start paying for the bonuses, unless the state Legislature does something to reduce or eliminate them.
“If we get to the point where the benefits due the retirees are greater than what the pension fund can pay, it’s the city that will have to fork over the money, says Maria Doulis, a CBC researcher. “And the city’s pension costs are already huge.”
Indeed, says a Bloomberg spokesman. “The city is already paying billions a year to cover the cost of the city’s outdated and unaffordable pension system,” says Marc LaVorgna.
He adds that Bloomberg has been trying for years to get Albany to do away with the VSF. Most recently, Gov. Paterson included such a measure in his pension bill, but the Legislature chopped it out.
Merry X-Mas, New York!