EDMONTON - More than $21 million in provincial funding earmarked to help the regional health authorities dissolve into the Alberta Health Services superboard went into covering the outstanding deficit in controversial bonus retirement plans for health executives while another $22.5 million went into executive severance pay, the Herald has learned.

The $43.5 million for executives ate up more than half of an $80 million grant the Progressive Conservative government made to the health regions in 2009 to cover transition and restructuring expenses when the nine regions and three boards — Alberta Cancer Board, Alberta Mental Health Board, and the Alberta Alcohol and Drug Abuse Commission — were folded into Alberta Health Services.

The lion’s share of that funding went to cover the $12.9 million liability of the Calgary Health Region executive pension plan and a $6.8 million liability in the Capital Health executive pension plan.

The details of the transactions are found in the March 31, 2009 financial statements of the East Central Health Region, apparently because the nine regions and three boards were merged into the East Central Health Region and renamed the Alberta Health Region.

“When AHS was formed, a portion of the government grant for transition was used to set aside sufficient assets to fund the supplementary executive retirement plans of the various boards and authorities,” AHS spokesman Kerry Williamson said Monday in an e-mail. “The supplementary executive retirement plans were all fully funded by March 31, 2010.”

The Herald reported last week that the employer-funded defined benefit plan for 50 health executives will cost the province $35 million. The story prompted auditor general Merwan Saher to announce plans to review the health services supplementary pensions to ensure recommendations his office made in 2005, 2008 and 2009 to limit the future liability of the plans have been implemented. His predecessor Fred Dunn had reported in October 2008 the health plans had an unfunded liability of nearly $22 million.

Critics slammed the governing Tories for allowing more than a quarter of the transition funding to be funnelled into what they have dubbed “gold-plated” supplementary pension plans that paid executives as much as $13,300 a month over and above their regular pensions.

“I am flabbergasted,” said NDP MLA David Eggen. “The money that was allocated for transition was not meant to clean up this messy business. The idea was to make the health system function more efficiently.”

He blamed the Tories for bungling the creation of the health superboard.

“We’ve been living with this big mistake for four years and the story just keeps getting more lurid.”

Wildrose MLA Shane Saskiw said he found it “disturbing” that there was such a high level of spending on executives while front line workers in the health-care system have had to pinch pennies to keep it running.

“It’s absolutely obscene that this amount of money would go toward these types of lavish supplemental pensions while the average worker and the average Albertan have to make do.”