Governor signs hospital CEO pension reform bill to prevent ‘double-dipping problems’

On Aug. 13, Gov. Jerry Brown signed Assembly Bill 130, authored by Assemblymember Luis Alejo (D-Salinas).
The bill prohibits healthcare districts from paying retirement benefits to its hospital administrators and CEOs while they are still employed by a healthcare district, according to a press release from Alejo’s office.
“This legislation is a straightforward approach to prevent pension double-dipping problems and overly generous retirement benefit promises,” Alejo said. “This new law will improve the transparency and accountability for the policies that healthcare districts implement to manage the retirement benefits of their top executives.”
AB 130 continues to address concerns raised by the nonpartisan California State Auditor’s report on the Salinas Valley Memorial Health Care System. The state audit highlighted the fact that in December 2009, the former CEO received a $2.1 million gross payment from a supplemental retirement plan and $917,000 was rolled into a personal individual retirement account while the CEO was still on payroll. The CEO continued working for another two years with a $668,000 annual salary.
Last year, Gov. Brown signed AB 2180, a bill introduced by Alejo to require health care districts to include in their employment agreements with hospital administrators specific information regarding compensation, retirement benefits, severance and any other benefit that differs from those available to other full-time employees. This bill took effect on January 1.
The Association of California Healthcare Districts, the California Nurse Association, the National Union of Healthcare Workers and the California Teamsters Public Affairs Council supported AB 130.
The bill received bipartisan support throughout the legislative process and will take effect January 1, 2014.