Pension probe

State Attorney General Andrew Cuomo is calling attention to a well-known practice with his investigation into more than two dozen local and state agencies for possible pension padding by employees using a loophole in the system to hike their pension benefits. But he has raised unfair suggestions of illegal activity by employees and employers with his highly publicized move.

Specifically, Mr. Cuomo has asked Lewis County, the town of Massena, the teachers retirement system and other state agencies and local governments for employee payroll information dating back several years to determine if future retirees took advantage of overtime to "pad" their pension payments or "game" the system.

Pensions are calculated based on the last three years of employment. For years, public employees have taken advantage of the system to increase their benefits by racking up huge amounts of overtime in the final year or two of employment. The attorney general cited several egregious examples of how the practice boosted pension payments with overtime pay well beyond base salaries.

Taxpayers end up paying twice, first for the inflated salary and then for the inflated pension benefits, Mr. Cuomo said.

However, the practice is legal. Attorney General Cuomo did not contest its legality. Instead, he used words like "pad," "gaming" and "scam" with innuendo of wrongdoing. It's not unlike his approach a couple of years ago that targeted attorneys for school districts and municipalities who had been eligible for public pension benefits but were suddenly deemed to be on the wrong side of the law for a practice that had been going on for years. Several attorneys were forced to repay pension benefits they received in good faith.

There is nothing new in pension spiking. Public employers have known about it; so have pension system administrators and lawmakers. The state Legislature and Gov. David A. Paterson last year addressed the longstanding problem in part with a new pension tier that caps how much overtime may be used in calculating pension benefits for new employees.

Mr. Cuomo suggested that some soon-to-retire workers might "monopolize" overtime opportunities to the disadvantage of less senior workers. Some employers may even cooperate in the scheme. Unfair maybe, but is it illegal? Fraudulent? Investigations are meant to find answers to such questions. The attorney general's probe may point to abusive practices that should be corrected, but care has to be taken to distinguish that from illegal conduct.