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New York Comptroller Offers "How-To" Guide on Pension Padding

4:38 PM, Sep 3, 2010   |    comments
New York State Comptroller Thomas DiNapoli (D)
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By BRIAN SHARP
Gannett Albany Bureau

ROCHESTER -- In recent days, state Comptroller Thomas DiNapoli has alleged overtime abuses at the Metropolitan Transportation Authority and announced dramatic increases in state and local governments' pension contributions.

But on the comptroller's website, under the heading "Maximizing Your Benefits," DiNapoli provides "tips" for government employees to pad their pension by stockpiling vacation and sick time, or working overtime and holidays.

"You may be unaware that you can increase your retirement benefits by increasing your service credit and/or final average salary," the site reads.  "Here are some tips for doing that."  For example, some of the guide's headings say "Increase Your Final Average Salary" and "Save Your Sick Leave."

A spokesman for DiNapoli said the office is merely informing employees of their rights.  On Friday, after the Democrat and Chronicle reported on the how-to guide, DiNapoli's office said it would update the language to make it clear they do not condone pension padding.  The guide dates back to 1998, said DiNapoli's spokesman Dennis Tompkins.  "We're going to update the language to make it clearer," Tompkins said.

He explained that, "We're not encouraging the use of overtime to increase pensions.  It may have been some unfortunate language, but we have an obligation to inform members of the law and regulations surrounding the calculation of their pension."

Some fiscal watchdog groups were stunned that the comptroller had a step-by-step guide to help public employees inflate their pensions.  "The comptroller is inviting public employees to 'game' the system so they can maximize their pensions at taxpayers' expense," said Lise Bang-Jensen, a senior policy analyst at the conservative Empire Center for New York State Policy, which analyzes state payroll.  "He has announced an investigation, a possible criminal investigation of MTA overtime fraud, yet on his web page he points out that if you work more overtime you will get a higher pension.  "The first time I saw this I thought, 'This is really weird.'"

At issue is a very real and serious challenge for state and local governments as they will see major spikes in pension contributions in the coming years.

DiNapoli announced Thursday that pension costs for state and local governments will soar by as much as 37 percent in 2012 as the state's $124.8 billion pension fund grapples with a sluggish economy.  Contributions that fund the state's Employee Retirement System will grow from 11.9 percent of a municipality's total salary to 16.3 percent in 2012.

While the poor economy is largely to blame for rising costs, critics have knocked provisions in state law that allow overtime worked in the final years of employment to count - within limits - toward an employee's pension.

Moreover, up to 30 days' vacation pay also can be applied, according to the comptroller's website.  And sick time can be credited toward years of service, also used in the benefit calculation.  The credit typically is capped at just more than six-tenths of a year.

The comptroller is both the chief auditor of state and local governments and the sole trustee of the state's pension fund.  In an audit last month, DiNapoli alleged "overtime abuse" by the MTA, identifying $56 million in wasteful spending.  He since has announced a "forensic audit" to determine if MTA employees broke any laws.

In March, Attorney General Andrew Cuomo, the Democratic candidate for governor, launched a statewide investigation into systemic pension padding, looking to root out any fraudulent activity.  Cuomo spokesman John Milgrim would only say that the investigation is continuing, noting that inflated pensions "can ultimately drive up local taxes and drive hardworking New Yorkers from their homes."

DiNapoli has supported the new Tier V law passed last year that, for new employees, caps the amount of overtime that can be considered for pension benefits at $15,000 per year for public workers and 15 percent of non-overtime wages for police and firefighters.

DiNapoli is seeking re-election, facing Republican challenger Harry Wilson.  Wilson ripped DiNapoli for the tips guide.
"What Mr. DiNapoli is doing is disturbing, but sadly unsurprising,"  Wilson said in a statement.  "He is a chronic Albany politician who has abused taxpayers for decades.  It's very sad, though, when the supposed 'taxpayer watchdog' is giving lessons in how to sock it to the taxpayers."

Gannett ContentOne - Rochester, NY

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