Heirs, state battle over windfall pension: Judge rules unpaid benefits, interest total $6.4 million.

Byline: Peter Hecht

Jul. 15--On Dec. 2, 1969, 22-year state employee Clarence Alexander retired on a high note.

The previous January, colleagues had honored the veteran business manager for the state Senate by electing him to a state officer's post as secretary of the Senate.

So when he stepped down 11 months later, the $22,000-a-year employee received credit for all his state service under a generous pension lawmakers created for a handful of legislative officers. Officials calculated his total pension at $215,695, a princely sum in the day.

More important, he became eligible for controversial double cost-of-living increases -- which lawmakers also bestowed upon themselves -- to grow his pension with yearly adjustments for inflation, and pay hikes for all state officers who succeeded him.

Lawmakers and angry voters later eliminated the multiplying pension perks for future officers. But nine years after Alexander died at 85 and two years after his widow, Frances, passed away at 93, his heirs stand to reap an unfathomable windfall: $6.4 million in allegedly unpaid pension payments and dramatically compounded interest.

Though declaring that the pension benefits due Alexander's estate "strain all credulity and border on the absurd," Administrative Law Judge Jonathan Lew ruled in May 2006 that …