By Joan Gralla

NEW YORK (Reuters) - New York authorities, agencies, and local governments that pay public workers some of the highest salaries and benefits in the state must explain how they are calculated, the attorney general said on Thursday in a new bid to root out abuses.

Pension payments to retirees in two funds that are funded by the state's $129 billion Common Retirement Fund more than doubled to above $7.3 billion in 2009 from $3.5 billion in 1999, Democratic Attorney General Andrew Cuomo said in a statement.

By working extra overtime before they retire, public workers can often increase their pension benefits. Cuomo, on a conference call, said that was a "scam" that had gone on for decades.

Pension payments often are set by an employee's final three years of service. "There is an obvious incentive to make the salary as high as possible in the final three years," Cuomo said. "The expectation is your salary is going to be a fair salary in the final three years."

But Cuomo said his office had found many examples of overtime spikes. As an example, he said a police officer whose base salary was $74,000 got $125,277 in overtime in his final year. That boosted his total income to almost $200,000 and snared him a $101,333 annual pension.

In 2007, the overall pension cost per New York state resident was $486, the highest in the nation, said Cuomo.

He sent letters seeking detailed data from 28 entities -- upstate and downstate counties, including Nassau and Suffolk -- the Port Authority of New York and New Jersey, the New York State Power Authority and several cities, villages and a town.

Cuomo also sought information from the departments of Health, Transportation and Correctional Services. The full list is at http://www.ag.ny.gov/media_center/2010/mar/FirstWaveRecipients.pdf

"There is currently a striking variance in levels of retirement benefits paid across the state," Cuomo said.

The average annual pension payment is about $25,000 but some retirees get over $300,000 a year -- and sometimes benefits top their salaries.

Cuomo, expected to run for New York governor, has spent three years investigating the state pension fund and the Office of the State Comptroller, which is the trustee. In March, a sixth person pleaded guilty the ongoing pension corruption probe.

The Common Retirement Fund gets about $2.5 billion a year from taxpayers and funds both the Employees' Retirement System and the Police & Fire Retirement System.

(Editing by Padraic Cassidy)