(dissenting). While the majority opinion reflects painstaking and logical analysis, I cannot agree with it. That is because I do not accept the basic premise upon which it rests. To me, it is clear that what the court is faced with in this instance is a not so well-disguised unconstitutional deprivation of respondents’ pension benefits. It is axiomatic in law that, what may not be done directly, cannot be done by indirection. If this court ratifies the scheme of the Legislature to take away from one group of police officers and give to another group of police officers what has been traditionally considered a pension benefit, the net result will be to emasculate NY Constitution, article V, § 7. The pensions of all public servants will henceforth be at risk. It is entirely conceivable, since these benefits are no longer protected against legislative incursions, that a State government, desperate to find new sources of revenue, may well use these funds for general public purposes.
Contrary to the findings of the court below, the parties do not disagree concerning the nature of the formulae for the allocation or crediting of member and employer contributions to the Variable Supplements Funds (VSF). Nor do defendants nor intervenors actually deny in their briefs that the average superior officer-retiree’s contributions and those made on his behalf exceed the average patrolman-retiree’s contributions. The city’s own actuary admitted this fact. There is no significant issue raised regarding the amounts distributed from the VSF. The one critical question which remains is the legal issue of whether the allocation formula, in light of the superior officers’ greater contributions compared with those of patrolmen violates NY Constitution, article V, § 7 and equal protection guarantees of the Federal and State Constitutions. I believe that they do and, hence, I must dissent.
*276New York Constitution, article V, § 7 provides as follows: “After July first, nineteen hundred forty, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.” It does not seem necessary to recite the numerous cases which hold that this constitutional mandate requires judicial invalidation of legislation which impairs the pension contract between public employer and employee. With regard to the specific problem before us, it is settled that the basis for calculating pension benefits cannot be changed in respect of incumbents (Birnbaum v New York State Teachers Retirement Sys., 5 NY2d 1; Kleinfeldt v New York City Employees’ Retirement Sys., 36 NY2d 95; Kranker v Levitt, 30 NY2d 574). Where “statutory changes in the computation or availability of [pension] benefits * * * were applied retroactively to prior members of a public retirement system, they were held unconstitutional” (Public Employees Fedn. v Cuomo, 62 NY2d 450, at pp 459-460).
The contractual relationship created by membership in the police department Pension Funds is governed by the central principle that the level of benefits paid by the plans and the1 amount of the members’ and city’s contributions to the plans will be based on the longevity of service and the salary levels of the members. Service disability and death benefits in Article 1 and Article 2 are virtually exclusively a function of years of service and salary level of the member involved. Similarly, contributions are made to the two Pension Funds by the city on behalf of each member, and by the member, based upon salary. Contributions to the Pension Funds are not segregated by rank, nor is the size of the contribution made on behalf of any member related in any way to the member’s rank.
It is not controverted that the typical individual who retires as a superior officer has contributed, and has had contributions made in his behalf, to the Pension Funds in greater amounts on average than one who retires as a patrolman. By ignoring length of service, the allocation plan contained in Administrative Code of the City of New York § B18-27.1 (d) (1), in a manner directly analogous to the situations in Birnbaum (supra) and its progeny, changes the basis on which police department pension benefits are to be calculated, long after the pension contributions upon which the earnings were generated have been paid into the Article 2 Pension Fund. This disadvantages all superior officers in favor of all patrolmen, and thus violates NY Constitution, article V, § 7.
*277It is frivolous to treat VSF law benefits as “nonpension” benefits. The VSF’s are included in the Police Department (PD) Pension Funds; they also are funded by Pension Fund income; and VSF benefits are payable only to PD Pension Fund retirees. Moreover, generally, local legislation cannot bestow money benefits upon individuals since no city may “give or loan any money or property to or in aid of any individual” (NY Const, art VIII, § 1, If 1). An exception is made for “increasing the pension benefits payable to retired members of a police department” (NY Const, art VIII, § 1,¶ 2; emphasis added). Absent this exception, supplemental benefits, such as provided by the VSF law, “would be an unconstitutional gift of public funds” (Matter of Rivington v Lowery, 70 Misc 2d 155, 157, affd 41 AD2d 703, Iv denied 32 NY2d 613). The effect of article 8, § 1, is that VSF law benefits cannot be deemed “nonpension” payments because they are invalid unless they are “increasing the pension benefits payable” to police department retirees.
This is not negated by the VSF law declaration that VSF benefit payments are not “a pension or retirement allowance” (Administrative Code § B18-61.0 [b]; § B18-63.0 [b]; § B18-81.0 [b]; § B18-83.0 [b]). The purpose of such declaration is expressly stated to be to reserve the legislative right to amend or repeal the VSF law (Administrative Code § B18-61.0 [b]; § B18-81.0 [b]). That a benefit is thus made amenable to future change or repeal, however, does not mean that the benefit, during the period it is in effect, was not a supplemental pension benefit subject to the pension “laws and conditions” then in effect (see, Public Employees Fedn. v Cuomo, supra, at pp 461-462).
The ability to change or repeal the VSF law, which was the purpose of the VSF law exclusionary language, cannot be gainsaid, but does not vitiate the effect of NY Constitution, article V, § 7, in respect of benefits accruing before such change or repeal. Matter of Maye (Bluestein) (40 NY2d 113) cited by the majority, is not to the contrary. That case did not involve any issue concerning the nature of VSF law benefits. The reference to such benefits “not constituting a pension or retirement allowance” (supra, at p 115) paraphrases the VSF law and is dictum.
The argument, that the implementation of Administrative Code § B18-27.1 (d) (1) here complained of does not impair or diminish the VSF supplemental pension benefits* proceeds from the erroneous assumption that article V, § 7, is violated only if the VSF law diminishes or impairs preexisting benefits levels. However, any change (to the prejudice of incumbents) in the method of calculating pension benefits violates NY Constitu*278tion, article V, § 7. Thus, a pension benefit based upon an altered method of calculation is invalid even if the benefit level after the change is not less than the level was before the change. The impairment or diminution is measured by the impairment or diminution “in the computation or availability” of pension benefits (Public Employees Fedn. v Cuomo, supra, at p 459). In this understanding of article V, § 7, the action here complained of works a pension benefit loss. For it is conceded that the VSF law deviation from the obtaining, and therefore contract, mode of calculating pension benefits causes a substantial loss of benefits. That loss is the impairment of benefits proscribed by article V, §7.
Article V, § 7, imposes the constraints of a trustee relationship upon the Legislature when it legislates the investment of pension funds in particular securities or their expenditure for any purpose (cf. Sgaglione v Levitt, 37 NY2d 507). The Legislature’s fiduciary responsibility as to pension funds cannot be exercised, as here, in a way that provides by design, not just by chance as a matter of actuarial experience, for the expenditure of such funds, contributed by or on behalf of one individual, for the payment of benefits to another individual.
In addition to violating article V, § 7, the allocation of transferable earnings between the Superior Officers’ (SO) VSF and the Patrolmen’s (PTL) VSF provided by section B18-27.1 (d) (1) also violates the equal protection clauses of the New York and United States Constitutions. Section B18-27.1 (d) (1) is constitutionally invalid because it arbitrarily distinguishes between superior officers and patrolmen in a manner which severely prejudices the rights of superior officers. Disparate treatment can violate the equal protection clause even if the nature of the difference is . not the imposition of a burden on one group, but rather, as in this case, the grant of a preference to another group (Matter of Abrams v Bronstein, 33 NY2d 488, 492-493; see also, Sunstein, Naked Preferences and the Constitution, 84 Colum L Rev 1689 [1984]). The equal protection clause is aimed squarely at eliminating the favoring of one group’s interests over another’s merely because the favored group enjoys greater political influence.
Conspicuously absent is any indication in the statute or legislative history which might provide some illumination on what legitimate goal the Legislature meant to accomplish through the allocation formula contained in section B18-27.1 (d) (1). It is asserted by defendants and intervenors that the Legislature meant to allocate the VSF proceeds in favor of those retirees *279with the greater economic need, and therefore chose a formula favoring those retiring in the rank of patrolman.
Even if, arguendo, it is assumed that the goal of the allocation formula in Administrative Code § B18-27.1 (d) (1) was to confer a greater benefit on the more needy retirees, the provision must be struck down because it bears no rational relationship to this goal.
The payment of disparate salaries or benefits to public employees has often been held to violate an employee’s right to equal protection where the basis for treating distinct classes of employees differently has been found to be arbitrary or not reasonably related to the goal sought (Matter of Abrams v Bronstein, supra; Weissman v Evans, 56 NY2d 458).
Like the bases for distinction used by the public employers in Abrams and Weinstein (supra) to distinguish those employees who would receive a benefit from those who would not, the criterion of rank employed by section B 18-27.1 (d) (1) to distinguish those members of the PD Pension Fund who will receive a substantial supplemental pension benefit from those who will receive a much smaller supplemental benefit bears no reasonable relationship to any legitimate governmental purpose. The one purpose posited by defendants and interveners, the alleged greater need of some retirees, is not reasonably served by section B18-27.1 (d) (1). Contrary to the assertions of defendants and intervenors, there is no basis for assuming that retired patrolmen have greater needs than retired superior officers. The average patrolman-retiree is younger than his superior officer counterpart, and is therefore more likely to embark on a second career after retirement, and less likely to be dependent solely on his police pension.
Nor can it be assumed that a patrolman’s final salary, and thus his pension, will be smaller than a superior officer’s. The only distinction is between patrolmen and superior officers as a matter of “personal preference.”
In any event, even if the “equal protection” provisions of the United States and New York State Constitutions are not violated by Administrative Code § B18-27.1 (d) (1), the promise of NY Constitution, article V, § 7, that pension or retirement benefits “shall not be diminished or impaired”, renders invalid the statute herein considered by the court.
Fein, Kassal and Rosenberger, JJ., concur with Sullivan, J. P.; Asch, J., dissents in an opinion.
Order, Supreme Court, New York County, entered on August 11, 1982, modified, on the law, without costs and without dis*280bursements, the cross motions granted, Administrative Code § B18-27.1 (d) (1) declared constitutional, and, except as thus modified, affirmed.