- 39 MPs elected in 2006 qualify for $30.9 million lifetime payout on January 23, 2012
OTTAWA, ON, -- With only a few days to go before the 6th anniversary of the 2006 election, the Canadian Taxpayers Federation (CTF) has released a report estimating that the cost to retire the entire 41st Parliament in 2015 is at least $262 million in cumulative pensions and $15 million in severance payoffs.
If every current MP were to stay in office until 2019, the CTF estimates the pension tab would soar to $436 million, with an additional $9.8 million in severance payoffs.
“These are conservative estimates,” said Gregory Thomas, CTF Federal Director, “no pun intended.”
The CTF has also discovered that while officially taxpayers contribute $5.80 for every $1 contributed by an MP to an MP’s pension account, the true amount is actually $23.30 for every $1 contributed by the MP.
The hidden contributions are due to the government adding “interest” into the MP pension accounts at a rate of 10.4 per cent per year – even though MP pension funds are not invested into the market like other pension funds (e.g. Ontario Teachers’ Pension Fund).
“Even during the market meltdown of 2008—when the Canada Pension Plan lost 18.6 per cent of its value, the Ontario Teachers’ Pension Plan lost 18 per cent, the Quebec Pension Plan lost 25 per cent and the S&P/TSX total return index lost 33 per cent—the MP pension plan returned 10.4 per cent, just as it has every other year,” continued Thomas. “I’d bet there’s a few million Canadians who would love to see a government-guaranteed 10.4 per cent annual return on their RRSPs.”
This taxpayer-funded “interest” results in taxpayers contributing $248,668 each year to each MP’s pension fund, while backbench MPs can contribute as little as $10,990 per year. The base salary for an MP is $157,000.
The government’s chief actuary said in 2010 that the interest rate MPs are paying themselves “is not appropriate” recommending it be cut by half. The actuary found the plan’s excess, or surplus, had climbed to $175 million in 2010.
“Teachers, bus drivers, farmers, cops, small business owners, would all love to get a pension at age 55 after only six years of service,” said Thomas. “We’re putting more into MP’s pension plans than we are paying them each year, and they only contribute $10,990 of that to this gold-plated pension scheme. It’s a national disgrace.”
Thirty-nine MPs will become eligible for the MP pension plan on January 23, 2012 after six years of service. The ‘Class of 06’ will be eligible for a collective $1,927,000 in annual pensions in 2015, adding up to $29.1 million by age 80.
The CTF is calling on MPs to shut down the current MP pension scheme and join the new Pooled Registered Pension Plan (PRPP) like any other Canadian worker. Further, taxpayer contributions should be capped at a dollar-to-dollar level and the “Lavigne clause” needs to be in place to ensure convicted fraudsters are barred from collecting Parliamentary pension benefits.
“It’s time to remove every kind of fraud and larceny from the Parliamentary pension scheme,” said Thomas.
“The Harper government is getting ready to make some tough choices: cutting spending, reining in wages and pensions for government employees and cutting unnecessary government jobs. They need the moral authority gained by cutting their own pensions if they want to rein in spending on government employee pensions,” concluded Thomas.
The CTF’s MP pension report contains estimates for MP pension and severance payments for every single Member of Parliament based on a 2015 and 2019 election.
It can be downloaded by clicking
HERE.
