Today, 34,000 retired city cops and firefighters get a Christmas present — an annual $12,000 bonus on top of their regular pension.
The Variable Supplement Fund (VSF) payments, created 40 years ago, come from pension funds, but those funds were so badly hurt in the recession, that some are concerned that the public could end up footing the bill for the payments, the nonpartisan Citizens Budget Commission said.
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“The assets were cut in half, meanwhile the payments have been going up,” said Maria Doulis, a CBC?senior research associate.
“If the performance of the market doesn’t rebound who picks up the tab? The answer is the city ultimately,” she said.
“They’re covered for this year,” Doulis noted. “We can assume, maybe, they’ll be for next year. The question is what happens after that.”
The city created the payments years ago in return for union approval to invest pensions in stocks.