POLITICS

Former N.B. MLAs fight pension cuts

03/20/2012 03:18 EDT | Updated 05/20/2012 05:12 EDT

Several former MLAs have decided to fight last year's reduction to their pensions by filing a complaint with the New Brunswick Human Rights Commission.

The retired or defeated Tories and Liberals say a retroactive clawback to their benefits is unfair.

Last year, the Alward government reversed a 2008 decision that boosted the pensions. As a result, MLAs who left office in 2010 are seeing their pensions reduced, in some cases by a third.

Former PC MLA Jeannot Volpé told CBC News his original pension was more than $50,000 a year. He says he decided to retire in 2010 and not run for re-election based, in part, because he expected a pension of that amount.

The change has reduced his pension by $18,000 a year, he said.

"Everything is now, 'OK, how do you pay for it?' Because for the first time in New Brunswick, government went back and cut a pension you were supposed to get that was vested," he said. "So now you've got to try to figure out how you will do it."

Volpé said no other government employees are seeing their pensions reduced.

"So I said, 'OK, we'll go to the Human Rights Commission and ask them what's their take on it. Is it OK what they've done, or have we been treated differently because we are former MLAs?'"

About a half-dozen former MLAs are trying to get their original pensions restored, according to Volpé.

Was one of richest plans in the country

In April 2008, New Brunswick politicians voted to increase their base salary to $85,000 from $45,347. In exchange, the MLAs terminated two tax-free allowances that previously were used to supplement their incomes.

That change ended up generating huge increases in MLA pension benefits because pensions are based on salaries and the increase in the total wage package flowed directly through to their retirement accounts.

The province's MLAs came under intense scrutiny for the decision, which gave them one of the richest political pension plans in the country. There were several calls for a review.

Premier David Alward campaigned on a promise to roll back the pension increase. He warned MLAs before the 2010 election that their pensions might change and that they shouldn't retire based on any assumptions.

But retroactively changing pensions may be on legally shaky ground. Jean-Claude Angers, a retired judge who had recommended undoing the 2008 boost to pensions, told CBC News last year reducing pensions already being paid out was risky.

"Being a judge, I know that when you try to give legislation a retroactive effect, it creates problems," Angers had said.