Oct 4 (Reuters) – Connecticut rewarded its state and local employees with the highest pensions in the nation, paying an average of $28,344, which bested second-ranked Colorado by $548, a new study said on Thursday.

The national average in 2006 was just $20,867, according to the Empire Center for Public Policy, which analyzed U.S. census data.

Fourteen states offered their retirees higher pensions than the U.S. average, with New Jersey ranked third at $26,824.

Rhode Island was the fourth-best state for government workers, paying an average benefit of $25,836, followed by Nevada at $24,997. New York was sixth at $24,293, according to the report by the Albany, N.Y.-based research group.

States that offered the smallest pension benefits tended to be less expensive places to live. Wyoming ranked 45th at $12,940, followed in order by Vermont, Montana, North Dakota and Iowa. West Virginia came in last at $11,034.

Public employees traditionally have been offered much more attractive retirement benefits than many of their private- sector peers. This is how cities, towns and states say they can make up for the disadvantage of the lower wages and salaries they typically pay.

But credit agencies increasingly are concerned about the cost of some of these public pension plans — especially when coupled with much more generous retiree health-care benefits, whose expense local governments are only now having to disclose.

MOST FRUGAL VS. MOST GENEROUS

The study’s rankings shifted when how much public employees were asked to contribute to their pension plans was analyzed.

On that list, New Hampshire was the most frugal, as its government workers contributed 20.2 percent of total receipts, according to the study by the Empire Center, which is a Manhattan Institute project.

South Carolina came in second, followed by New Jersey and North Carolina. Fifth on the list of states that were easiest on taxpayers’ wallets was Arizona, which had a 16 percent contribution rate.

New York, which has some of that nation’s highest income and property taxes, was one of the most costly when it comes to funding public pensions with the public’s purse. It ranked 45th, only asking workers to contribute 2.5 percent of total receipts, the study said.

“New York taxpayers disproportionately funded the state’s pension-benefit payments to government workers,” the report said.

The Empire Center says it seeks to encourage “greater economic growth, opportunity and individual responsibility.”

Utah was 46th on the list of the states with the lowest contribution rates, followed in order by Virginia, Florida, and Wisconsin.

Oregon was 50th, demanding only a 0.1 percent contribution rate.

Read article here