Cuomo Expands Public Pension Probe

Thursday, March 18, 2010

New York Attorney General Andrew Cuomo is expanding his investigation into pension fund corruption.

Instead of focusing on those who manage the $130 billion public pension fund, as he’s done for the last three years, he is looking into public employees who collect pensions and the so-called practice of "pension padding."

Cuomo says "pension padding" is when employees inflate their pay in the last three years of service by working overtime so that they can collect a higher pension. Pension payments are calculated by employees' final three years of employment and are supported by taxpayers.

The attorney general is sending letters to 28 state agencies and local governments that have some of the highest salary or pension payments in New York. He is seeking payroll and related data for pension recipients employed by Nassau County, Suffolk County, the Department of Transportation, Department of Correctional Services, New York State Teachers Retirement System, and the Port Authority of New York and New Jersey.

The attorney general says while the average annual public pension payment in New York State is about $25,000, the pensions paid to some individual retirees top $300,000 each year, and some retirees end up receiving more in pension than they received in salary.

Here are some examples of inflated salaries that can lead to inflated pensions, which Cuomo offered today:

  • A water department worker took in more than $30,000 in overtime and extra pay in addition to his $40,000 salary for a total salary of almost $74,000.
  • A county animal control officer took in more than $19,000 in overtime in addition to his $38,000 salary for a total salary of more than $57,000.
  • A police officer earning a base salary of $74,000 took in $125,277 in overtime in his final year, bringing his total income to almost $200,000. Based on this inflated final year's salary, he then received a $101,333 annual pension.
  • A sanitary district official saw his annual salary increase from approximately $150,000 to over $200,000 through raises, bonuses, and special payments.
  • Cuomo's office says New York State had an overall pension cost of $486 per resident in 2007, the highest in the nation.

Cuomo says this type of salary manipulation causes a “one-two punch to the taxpayer” -- first through unnecessarily high payroll costs for the public employer, and again through artificially inflated pension payouts.

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