State and local government employers should adopt measures to prevent employees from boosting their pension benefits by working large amounts of overtime shortly before retiring, New York Attorney General Andrew Cuomo said last week.

Cuomo, who is running for governor, said that an investigation into 64 municipal employers, authorities, and agencies revealed that some employees worked overtime only in the few years before retirement, or significantly increased it during that time.

Employees’ pension benefits are calculated from their total income during peak years rather than their base salary, giving them an incentive to work overtime in their final years.

“This investigation has uncovered problems that go beyond titles, regions, or job responsibilities,” Cuomo said in a news release. “That’s why we have put forth practices that can reduce the abuses of the pension system and protect taxpayers.”

Cuomo recommended that employers adopt overtime caps, move away from systems granted under collective bargaining agreements that assign overtime work based on seniority, and maintain adequate staff levels in order to reduce overtime.

New York had the highest per-capita pension costs in the nation, according to 2007 data that put the cost at $486 per resident, according to the press release. The state’s common retirement fund has assets of more than $129 billion and covers more than one million members and retirees.

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