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Cuomo probes pension padding

Erie County government and Roswell Park Cancer Institute are among the initial targets of a state probe into pension padding.

Attorney General Andrew M. Cuomo on Thursday sent letters to 28 local and state agencies throughout New York to determine how overtime is being used -- or abused -- to increase employee pensions.

Cuomo called pension padding a "scam" upon taxpayers that's been going on for decades and needs to stop.

"Enough is enough," he said.

The 28 agencies being asked for information -- including Erie County and Roswell Park -- represent the first phase of the investigation, which is likely to spread to other governments and agencies in the future, including the City of Buffalo, said Cuomo spokesman John T. Milgrim.

"This was the first wave," he said.

The initial agencies were selected, Cuomo said, because they have some of the highest salary or pension payments in the state.

Erie County government, not including Erie County Medical Center, will pay $33.6 million into the state pension system this year for its current employees, Personnel Commissioner John W. Greenan said.

Erie County has its share of employees who are able to pad their pension by racking up large amounts of overtime in their final years on the job. In the Sheriff's Office, for example, 40 deputies worked enough overtime in 2006 to turn their $50,000 job into a $100,000 one, records show.

The following year, two of those deputies retired with approximately $85,000 annual pensions -- for a job that carries a base pay of about $54,000 a year.

Similar scenarios occur in the county's Public Works Department, where mechanics are in short supply. One, for example, added $47,000 in overtime to $45,000 in base pay in 2009, according to county records.

Some of the biggest pensions coming out of Erie County, however, go to non-union county employees. They don't rack up overtime in their final years on the job, but do sometimes get higher-paying positions toward the end of their county government careers.

Sheila K. Kee, for example, the former Erie County budget director and later interim head of Erie County Medical Center, retired in 2006 with a $99,389 public public pension based on a final average annual salary of about $164,000. Upon retiring, Kee went to work for the state Department of Health, collecting a $152,000 annual paycheck in addition to her pension.

In another case, Edward J. Kasprzak, also a former county budget director, retired as deputy director of the Erie County Water Authority. He earned about $137,000 a year in his final years on the job -- resulting in his $97,530 pension, state records show.

Similarly, the biggest pensions coming out of Roswell Park go to high-paid professionals -- the doctors -- not the union employees working overtime, records show.

One oncologist, for example, retired from Roswell in 1999 with a $125,091 pension, based on a $295,858 salary. Another retired in 2007 with a $115,921 pension from his $239,784 Roswell salary.

Nonetheless, much of the overtime pension padding occurring in local government is associated with union employees -- particularly police and firefighters -- pumping up their overtime in the final years of their career. Pensions are typically based on the average salary in the final three years of employment.

A Buffalo News investigation conducted in 2008 and 2009 -- "Public Pensions: Cashing In" -- found, for example, that it's not unusual for Buffalo police and firefighters to retire with pensions that exceed their base pay.

One officer, The News found, racked up $123,000 in overtime in his final year on the job, bringing his paycheck in 2007 to $188,747. The officer retired with a $105,361 pension on a job with an annual base pay of $58,243.

More recently, it was disclosed that Barbara Miller-Williams, chairwoman of the Erie County Legislature, is getting ready to retire from her job as a Buffalo police officer.

In preparation, Miller-Williams worked more than $51,000 in overtime, boosting her total annual pay to nearly $128,000 -- double her base salary.

"The norm is to work very, very hard to increase your average [salary]," Williams told The Buffalo News. "I've done nothing different than what anyone else has done. I worked as hard as I could, but I had other responsibilities, so I couldn't work as hard as some of my colleagues. But I did the best I could."

Such pension padding is going on throughout the state, Cuomo said.

"We have found many cases where the salary in the final three years spiked artificially, egregiously, and then increases significantly the rate of the pension," he said, adding: "And who do you think pays? The taxpayers pay. The taxpayers always pay."

The letter sent out to 28 agencies Thursday asks for salary and overtime information going back eight years for all employees who retired in 2009.

The governments are asked to provide the information by April 1.

Following publication of the Buffalo News pension series, Paul J. Kolkmeyer, then head of city's control board, called on New York State to exclude overtime from pension calculations for all employees in the state pension system.

"You have people working 25 to 30 years and making one salary for 25 to 30 years with little overtime. Then, all of a sudden, they are retiring, and people are using overtime to pump up their pensions . . . and their pensions are in excess of what they are earning," he said.

Greenan, the Erie County personnel commissioner, Thursday agreed that the state needs to address the pension-spiking issue.

"The issue of pension spiking is something that's a statewide problem," Greenan said. "It's an issue that really should be addressed to the State Legislature and the governor. The issue is that these are unionized employees who, under their union contracts, the most senior employees get the first bite of the [overtime] apple."

e-mail: sschulman@buffnews.com and mspina@buffnews.com

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