MP Pensions: Canadian Taxpayers Being Taken To Cleaners, According To Advocacy Group
Canadians are being taken to the cleaners by their own MPs for an overly generous pension plan, the Canadian Taxpayers Federation said Wednesday.
The cost of retiring the 41st Parliament would be $262 million in cumulative pensions and $436 million if every MP was to stay in office until 2019, the Federation said in a new report.
What's more shocking than the overall price tag, the Federation said, is that taxpayers contribute more than $23 for every one dollar an MP contributes to his or her own pension plan.
"(Taxpayers) are putting more money into the pension plan than they are actually paying MPs in salary every year," said Gregory Thomas, the group's federal director.
While backbench MPs earn $157,731 a year, Thomas said, an additional $248,000 is added to each of their pensions ever year by taxpayers, while they may contribute as little as $10,990.
The system has been rigged so that the MP pension plan -- which unlike the Canadian Pension Plan or RRSPs is not invested in the market -- pays itself a 10.4 per cent rate of return.
"It's a phony return set on an imaginary investment," Thomas said. "This rate means they basically have the best performing pension over 10 years on the planet ... It's probably the best pension plan on earth."
Next Monday, 39 MPs who were first elected in 2006 will pass the 6-year threshold to qualify for their parliamentary pension.
They will enter "the promised land" in the words of Thomas.
Together, the 39 MPs are set to collect $30.9 million in lifetime payouts, according to the federation.
Younger MPs such as 33-year-old Conservative MP Chris Warkentin and 38-year-old Industry Minister Christian Paradis will have to wait until they are 55 years of age to collect. But even if they don't run again, the Federation said Warkentin and Paradis will still receive an annual pension for the rest of their lives worth at least $46,049 and $61,581 respectively.
"People are walking away after six years on the job with a big payout for life. Starting at 55, a guaranteed index payoff, many of them in the multi-million of dollars," Thomas said.
Although the fictitious rate of return was set by cabinet, and MPs decide on the fate of their own finances through a small all-party committee that meets behind closed doors, the Federation called on the Conservative Government to turn off the taps.
"There is no way the Prime Minister and these MPs can do what they need to do to balance the budget and control spending if they have their own snouts in the pension trough. They need to lead by example, they need to put Canada ahead of their own personal bank balance," Thomas said.
He called for the immediate shut down of MPs' "platinum-plated pension plan" and the creation of a matching dollar-for-dollar defined contribution pension plan similar to the new registered pension plan, the PRPP, the government wants "all of us to adopt."
"If it's good enough for Canadians, it should be good enough for our MPs," Thomas said.
Top 10 Most Expensive MP Pensions
Welcome to the $3 million club. The following 10 MPs will each receive an estimated total lifetime pension of more than $3 million if they retire in 2019. All the <a href="http://taxpayer.com/sites/default/files/CTFMP-PensionReport-WEB.pdf" target="_hplink">estimates come from the Canadian Taxpayers Federation</a> and are based on an MP retiring in 2019 and ceasing to receive their pension at age 80. The numbers if the MPs retire in 2015 are also included in the caption to each slide.
10. Michael Chong - $3,124,903
Conservative MP Michael Chong would receive an estimated lifetime pension of $2,684,816 if he were to retire in 2015.
9. Peter Van Loan - $3,194,114
Conservative MP Peter Van Loan would receive an estimated lifetime pension of $2,462,029 if he were to retire in 2015. (CP)
8. Rona Ambrose - $3,330,876
Conservative MP Rona Ambrose would receive an estimated lifetime pension of $2,429,149 if she were to retire in 2015. (CP)
7. Rob Anders - $3,643,873
Conservative MP Rob Anders would receive an estimated lifetime pension of $3,034,089 if he were to retire in 2015. (Jeff McIntosh/CP)
6. Denis Coderre - $3,701,989
Liberal MP Denis Coderre would receive an estimated lifetime pension of $3,288,821 if he were to retire in 2015. (Graham Hughes/CP)
5. Scott Brison - $3,723,666
Liberal MP Scott Brison would receive an estimated lifetime pension of $3,113,881 if he were to retire in 2015.
4. James Moore - $3,795,386
Conservative MP James Moore would receive an estimated lifetime pension of $2,893,658 if he were to retire in 2015. (Althia Raj)
3. Gerry Byrne - $3,996,498
Liberal MP Gerry Byrne would receive an estimated lifetime pension of $3,450,711 if he were to retire in 2015.
2. Jason Kenney - $4,318,507
Conservative MP Jason Kenney would receive an estimated lifetime pension of $3,416,779 if he were to retire in 2015. (CP)
1. Stephen Harper - $5,596,474
Prime Minister Stephen Harper would receive an estimated lifetime pension of $5,456,109 if he were to retire in 2015. Harper's numbers are based on the PM not buying back into the program for his service as a Reform Party MP between 1993-1997. In order to make a political statement, Harper did not contribute to the pension program during his time as a Reform MP. After returning to Parliament Hill in 2002, Harper could have retroactively contributed to the program for his service from 1993 to 1997. According to the PMO, Harper has not and will not make those contributions. MPs are not obligated to disclose this information. If Harper were to choose to buy back in for those years, his numbers would change. If he were to buy back in and retire in 2019 he would receive an estimated lifetime pension of $6,216,858 and $6,233,568 if he were to retire in 2015. His numbers also include the special allowance he will receive as Prime Minister. An earlier version of this story used the numbers based on Harper buying back in for the 1993 to 1997 period. After being contacted by the PMO with the prime minister's pledge not to do so, the numbers were updated. (CP)