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NEW YORK, Feb 9 (Reuters) - New York City's firefighters and police officers rallied on Wednesday to stop Mayor Michael Bloomberg from "stealing" a $12,000 a year payment for their retirees.
The yearly payment -- which is paid on top of regular pension benefits -- has become the flashpoint in a series of pension cuts Bloomberg unveiled last week. For details, see: [ID:nN02245006].
The $12,000 payment -- which Bloomberg, a former Wall Street trader, calls a bonus -- has a complex history.
It dates back to 1988, when the amount was fixed from the fluctuating payment that was due under a late 1960s accord, city officials said. Five decades ago, the unions resisted the city's plans to invest some of the pension funds in equities instead of solely in bonds, and the annual payment was the sweetener that persuaded them to go along.
The unions and the mayor have clashed about almost everything: the payment's history, including whether it ever allowed the city to earn a windfall from the stock market, and whether a union benefit once granted can ever be taken away.
New York City, like many states and cities around the nation, is struggling under costly pensions granted unionized public workers. Many governors and mayors can only start curbing pensions for people yet to be hired because the current benefits are protected by statutes, union contracts or state constitutions.
The yearly payment is one of the very few pension benefits that is not protected by the state's constitution.
The state legislature might have to enact a law to cancel the annual payment, city officials said. But it is not clear whether the Democratic-led Council would have to approve.
The mayor has estimated that if subway fares had risen at the same clip as the city's pensions, it would cost $7.05 to ride the subway -- instead of the current $2.25.
The unions, which fault the mayor for calling their annual payment a bonus, took to the steps of City Hall to protest.
Patrick Lynch, president of the Patrolmen's Benevolent Association, said in a statement: "A lie is a lie no matter how many times you say it."
Bloomberg told reporters: "We certainly didn't put out anything that is -- to the best of my knowledge -- isn't accurate and true." He added: "The question is how are we going to provide the services people want without raising taxes?" (Reporting by Joan Gralla and Edith Honan; Editing by Dan Grebler)