In another crackdown on pension spiking, the Contra Costa retirement board trimmed payments to four county doctors who had been overcompensated since 2012.

The Contra Costa County Employees' Retirement Association on Wednesday cut by an average 9 percent the future pension payments to Drs. Krista Farey, David Hearst, Priscilla Hinman and Dana Slauson.

The action reduced their annual payouts by an average $10,000 each. For their lifetimes, assuming normal longevity, the cuts average about $150,000 each in today's dollars.

However, departing from past practices, the retirement board decided to recoup nearly three years of past overpayments from the county rather than the retirees.

It was the right decision. As reported here in 2013, the pension spiking resulted from a scheme Health Services Director William Walker cooked up to inflate doctors' salaries without approval from the county Board of Supervisors.

The doctors didn't know the extra pay they received during their final year could not legally be counted as income when calculating their pensions.

It's the third time in 10 months that the independent retirement board, comprised of county, employee and retiree representatives, cut retirees' pensions.

In May, the board trimmed 11 percent, or $14,000 annually, from Paul Andrews' retirement pay. The county hazardous materials worker spiked his pension by claiming 4,836 on-call hours during his final year of work. The present value of the cut over his expected lifetime is about $216,000.


The retirement association is currently reviewing similar pension spiking by other hazardous materials workers.

In September, the board reduced former Moraga-Orinda Fire Chief Peter Nowicki's pension by 28 percent, or more than $67,000 annually. In today's dollars, that's about $1.7 million over his expected lifetime.

Nowicki spiked his pension by orchestrating an amendment to his contract three days before he announced his retirement. He has filed a lawsuit seeking to overturn the pension cut.

The retirement association's review of questionable pensions began in 2014. It was prompted by new state law mandating such reviews, years of reports of excesses and a shift in membership of a board once controlled by labor advocates.

Interestingly almost all the retirement board members, including labor representatives, have supported the rollbacks. The vote Wednesday to trim the doctors' payouts was 8-1.

Board members expressed sympathy for the physicians but noted that state law forbids the extra retirement payments. Pensions are calculated based on years of service, age at retirement and, significantly in this case, top annual salary.

But the income used in pension calculations can only be for labor performed during normal working hours that is required of all employees in the same job classification. The idea is to prevent an employee from, for example, working lots of overtime to fatten a future pension.

In this case, however, the claimed work was voluntary, was beyond their standard 40-hour workweek and didn't apply to all county physicians.

Walker, the health services director, implemented the special compensation program in 2011. He later said it was needed to attract and retain doctors. Primary care doctors were eligible if they agreed to work at least 18 hours a week in the county's community clinics and manage care for groups of patients.

In exchange, the doctors received an additional 7 1/2 hours of bonus pay each week. The county reported the pay to the pension system as compensation for being on-call after hours.

On-call pay was considered income that could count in future pension calculations. In fact, Walker later acknowledged, the doctors weren't on-call during those extra hours.

Walker used the subterfuge to avoid seeking Board of Supervisors' approval for salary increases. The county auditor's office uncovered the scheme in 2013 and reported it to the pension system.

The discovery triggered two retirement association investigations. The first, still ongoing, examines whether doctors' on-call pay meets the legal requirement to be counted in pension calculations.

The second questioned whether compensation for Walker's special program met the requirement. The pension board said no.

The four doctors on Wednesday told of hardships resulting from the average $10,000 annual cuts to their pensions. However, in addition to their remaining pensions, averaging $97,000 a year, they each also continue working part-time for the county, receiving annual income averaging $74,000.

Daniel Borenstein is a staff columnist and editorial writer. Reach him at 925-943-8248 or Follow him at