Employees said a buy-out offering early retirement from New York's Con Edison Co., turned out to be a loan that required sizable deductions from their pension checks, the New York Post reported.

Lawyers filed a class-action suit in federal court in New York City.

"This is the biggest loan scam ever," attorney Lenard Leeds said.

Plaintiffs said when the loans were made, there was no mention of interest charged. However, the retirees found monthly checks were reduced at higher-than-expected rates.

Jim Watson, a 38-year employee, retired in 1997 and found his pension checks reduced from $3,500 to $1,900, the report said.

Con Ed did not comment on the case. A spokesman said the company had yet to see the filling.

"I'm getting by, but it's tough," Watson told the Post.