Pension Creates 6-Figure Winners
By James M. Odato, Albany Times Union, N.Y.
May 18–ALBANY — George M. Philip is a notable man in many ways, including the fact that his state pension is 16 times that of the public servant’s.
Philip tops a list of 899 people making at least $100,000 annually from New York retirement payouts — a list obtained by the Times Union.
The 60-year-old Burnt Hills resident receives $261,030 annually from the State and Local Retirement System run by Comptroller Thomas DiNapoli.
He also receives another $280,000 a year in salary for his new job in academia. In November, after ending his career at the separate State Teachers Retirement System, Philip immediately received a waiver to allow him to become interim president of the University at Albany.
Although Philip’s compensation is extraordinary, he is not alone in the six-figure club. Nor is he the only guy double-dipping.
The list of 899 pensioners receiving at least $100,000 from DiNapoli’s accounts is top-heavy with former cops from Nassau and Suffolk counties, the Power Authority and the Port Authority of New York and New Jersey. Many of the police officers retired before their 50th birthday after piling up overtime pay that amplifies the top three earning years that drive a formula used to calculate an employee’s final pension.
It also includes people who were dismissed from their jobs for dishonorable behavior, including at least three people who were found guilty of crimes committed in their public posts and another person booted from his job because of improprieties.
For instance, former Comptroller Alan Hevesi, who oversaw the $154 billion pension fund, pleaded guilty to a felony of defrauding the state government. He’s still drawing his pension of $104,123 after about 30 years of public service.
Former Power Authority lawyer Carmine J. Clemente, of Albany, who was fired last year after the attorney general and inspector general found he misused his health care benefits, is No. 25 on the list with a pension of $163,040. He pleaded guilty to a misdemeanor charge. Before retiring, he misused more than $21,000 by claiming his ex-wife on his health policy, investigators said.
His brother, Michael Clemente, was fired from his post as general manager of the State University of New York Construction Fund in 2002 after state investigators found he violated contract rules to help a distant relative of Gov. George Pataki’s. After his dismissal, he was hired by Senate Republicans as a budget officer and built more years of credits. His pension: $111,473.
At least four former heads of Off Track Betting Corp. are on the list, including one who’s public career ended in dishonor and a criminal conviction — Capital District OTB founder Davis Etkin of Schenectady is No. 296, getting $116,217 a year.
Etkin’s guilty plea in 2000 to treating himself to OTB assets and attempting to bribe a witness who was to testify against him followed an investigation into his lavish spending and questionable use of $4 million while at the helm of the Schenectady-based betting operation.
Other former OTB heads on the list include Donald Groth, of Catskill OTB, at $115,442; Joseph Mondello, the state GOP leader, from Nassau OTB, at $111,697; and his successor at the post, another Republican politician from the county, Gregory Peterson, at $116,188.
Groth just recently retired at age 65. He remains as the head of the OTB making $219,000 annually because, he says, he’s got a lot of unfinished business to accomplish in Albany, lobbying for changes to betting laws, before exiting.
"I’ve been very good to OTB, but it was a two-way street," Groth said. "When you’ve invested 40 years in something, there should be some return."
No. 241 on the list is Albany attorney James W. Roemer Jr. The 63-year-old lawyer retired in 2001 with a $119,874 pension. His package came together from credits for part-time employment with municipalities, including Utica and Schenectady, despite being a private attorney. Roemer filed a class-action lawsuit last week aimed at blocking Attorney General Andrew Cuomo and DiNapoli from stripping pension credits from lawyers.
At No. 812, George Pataki is the only ex-governor on the list, at $101,200 a year. Some of his lieutenants and aides, such as former director of operations James Natoli, No. 181 with $124,002, and Maryanne Gridley, No. 107 with $133,054, also made the list. Pataki beefed up pay for commissioners, directors and himself during his 12-year tenure, helping all to build their pension nests.
No. 546 is John L. Buono, who served as Hudson Valley Community College’s $170,000 per-year president until retiring from the post at the end of 2003 at age 60.
HVCC kept him on another year as a consultant. That made him able to collect a pension at the same time as his post-retirement consulting fee of $170,000. After three decades of paid public service — including stints as Rensselaer County executive and head of the state Dormitory Authority — he remains as the Pataki-appointed chairman of the Thruway Authority and last month voted to increase tolls. Although the post doesn’t include a salary, his pension of $107,315 provides income.
A top former Senate aide, Kenneth Riddett, Senate Majority Leader Joseph L. Bruno’s top lawyer for years, was also high on the list, receiving $136,748. He had a long public career and Bruno bumped his pay up shortly before he retired two years ago to become a lobbyist.
Cuomo said it may be worth considering penalizing criminals who stole from the state with forfeiture of pensions, but said that would require a constitutional amendment.
Stephen Madarasz, a spokesman for the Civil Service Employees Association, said CSEA wouldn’t mind seeing criminals stripped of pensions. He said he believes that change could be made by statute.
Others note that police officers and firefighters are enjoying substantial pensions thanks to the overtime they get and that should be changed.
Keith Brainard, research director of National Association of State Retirement Administrators, said New York’s pension formula isn’t out of whack. It offers 2 percent of pay for each year, 1.66 percent for those who don’t make it to 20 years. The average multiplier for public pensions nationwide is 1.85, Brainard said.
"I suspect a large proportion of those officers getting a six-figure pension worked a lot of overtime," he said. "If the (Legislature) in its infinite wisdom chose to change that, it could."
Assembly Government Employees Committee Chairman Peter Abbate, D-Brooklyn, said he doesn’t like taking away benefits. People enter public service jobs counting on overtime and constitutionally protected pensions as part of their compensation, he said.
Cops in many agencies can retire with full benefits after 20 years. Some work 80 hours a week for long periods during their last few years to build up pensions, according to employers such as the Port Authority.
"The mayors and county executives complain that pensions cost so much," Abbate said. "They should direct their chiefs of police or police commissioners not to offer them overtime. The Port Authority thinks they’re going to save money by not hiring people, so what happens? They force overtime taken by their more senior members."
Nassau County Executive Thomas Suozzi, a Democrat who has tried to cut police expenses, said he isn’t happy seeing so many of his former officers on the list of the highest paid pensioners, several in the $150,000-a-year club. "It’s an outrageous abuse," he said. "It’s unconscionable how much they make in salaries in the first place, but then it’s the cost of pension payments."
There are 350,000 people receiving retirement checks from the public pension system. The average benefit is $16,202 for most state workers, $35,877 for police and fire retirees.
At $261,037, Philip, whose pension tops the list, said he worked 38 years to put together his nest egg. The sum was calculated based on the average of the highest three years of salary times the number of years in the system and the multiplier.
"Not too many of my colleagues worked in public service so many years," he said, adding that he held the jobs of CEO and chief investment officer. He suggested he was underpaid at $379,600 while overseeing a $105 billion pension fund.
The state Legislature helped him. In 2000, it sweetened the pensions for public workers by setting up automatic cost-of-living increases, the discontinuation of 3 percent co-pays for any worker with 10 years of service and two extra years of service credit for the older members of the system who never had to contribute to their pensions, such as Philip. Bottom line, he got 79 percent of his final average salary.
He said he hopes his interim gig at UAlbany ends soon, so he can actually be retired. But if the school needs him, he said he’ll apply for another waiver that allows him to keep working, and collecting a paycheck. M. Odato can be reached at 454-5083 or by e-mail at jodato@timesunion.com.
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