When management and union employees buy prior service to apply toward the Port Authority's pension program, they pay out of their own pockets.

There has been one exception: Paul Skoutelas, the authority's former chief executive officer.

Authority officials confirmed yesterday that $181,530 used as a "buyback" for 11 years of public service with transit agencies in Florida, New Jersey and Bucks County came out of the transit agency's treasury. That allowed Mr. Skoutelas to get Port Authority pension benefits covering 29 years instead of the 18 he actually worked there.

The unusual perk was among a number of items included in a contract renewal the authority board unanimously approved Aug. 10, 2000. The five-year contract carried Mr. Skoutelas through a September 2005 retirement at the age of 52.

"[The buyback] was spelled out in a resolution and board action was taken at a public meeting," authority spokesman Bob Grove said. He would not comment further, pointing out that Mr. Skoutelas has filed a federal lawsuit on another matter related to his contract, claiming that the authority has illegally reduced his monthly pension by more than $3,000.

Mr. Skoutelas had been receiving a monthly pension of $9,066. That includes a $500-a-month bonus for employees with 25 years of service until age 62, a provision that Mr. Skoutelas met as a result of his buyback.

The authority board has since discontinued the bonus, along with all pension buybacks except for military service, as part of reforms and cost-cutting.

"Wow!" was the reaction of Patrick McMahon, president-business agent of Local 85, Amalgamated Transit Union, when he was told that the authority had paid for Mr. Skoutelas' buyback. "Nothing surprises me anymore. I heard rumors of that, but nobody would ever confirm it."

The union represents 2,400 bus-trolley workers still on the payroll after service cutbacks. Mr. McMahon said Local 85 members who have chosen buybacks toward their pensions have almost always applied only time served in the military but always paid for it themselves.

"If what the board did at that time [2000] was legal, it certainly was immoral," Mr. McMahon said. "It's amazing that it took this long to surface."

When Mr. Skoutelas' last contract as authority CEO was approved, the board raised his annual salary to $185,000, up from $180,000. It also provided annual increases of $5,000 and up to a 10 percent "performance bonus" each year.

When he left after eight years as CEO, his annual salary was $210,000. In addition to his pension and lifetime health insurance, he received a $380,213 lump-sum payment from a controversial Deferred Retirement Option Program that the board adopted upon his recommendation, and $106,202 in unused vacation and sick time.

Mr. Skoutelas, of Mt. Lebanon, is now a senior vice president at Parsons Brinckerhoff, a consulting and engineering firm. He couldn't be reached for comment yesterday.

He worked for the Port Authority for 18 years, with an interlude as CEO of the Orlando, Fla.-based transit system. His pension is based on 29 years of credited employment, starting after his college graduation.

The authority notified him in May that the 1998 Qualified Governmental Excess Benefit Agreement, which allowed for payment of a "participant's annual pension benefit that exceeds the maximum annual benefit limitations," had been discontinued. As a result, Mr. Skoutelas' monthly pension check was reduced from $9,066 a month to $5,947.05, but he still tops the list of authority pension recipients.

In his lawsuit, Mr. Skoutelas charges the authority with breach of contract, denial of property without due process and impairment of contractual rights and obligations.

The Port Authority contends that its board had never approved the original agreement, making it nonbinding, and has demanded that Mr. Skoutelas repay $64,778.88.

Mr. Skoutelas' attorney, Eric Stoltenberg, called the authority's actions "unconscionable."