When Bev Oda's resignation from Parliament and cabinet took effect on July 31, she lost her $233,247 salary, her car and driver, and allowances for travel and housing.
Oda's career went up in smoke. Literally. She famously a billed taxpayers for everything from chauffeured limousines, a $16 glass of orange juice and luxurious accommodations at London's Savoy Hotel.
SLIDESHOW: TOP 10 MP PENSIONS
However, most of the questionable expenses related to the former international development minister's smoking habit -- covering up the aroma, dodging cheaper hotels with no-smoking rules, getting to meetings in no-smoking facilities or purchasing air purifiers. As they used to say in Ottawa, where there's smoke, there's Bev Oda.
But her days of cashing cheques from taxpayers have a long way to go. Oda started collecting her parliamentary pension on August 1 at the handsome rate the Canadian Taxpayers Federation estimates at $52,183 per year. The pension is indexed to inflation, so it will rise every year with the cost of living. It's guaranteed for life. If anything should happen to the retired parliamentarian, a surviving spouse is entitled to 60 per cent of the money for life.
That's pretty rich, considering that she only served eight years as an MP. Consider how hard somebody would need to work to save up a nest egg like that, operating in the real world, rather than Parliament Hill. In order to collect $52,000 annually for life starting at age 67, indexed to inflation, with a further $31,000 annually to your surviving spouse for the rest of their life, you would need to save over $800,000, assuming you could get the kind of returns the Canada Pension Plan has produced: 6.2 per cent.
To save up $800,000 in eight years, again assuming you didn't invest in anything wild and crazy, and you got the same kind of returns the national pension plan generates, you would need to save about $80,000 every year
In Bev Oda's case, she chipped in $16,327 of her own money to the MP pension plan last year, or seven per cent of her salary, bringing her contribution to roughly $120,000 over her eight years in Parliament.
If most Canadians tried to turn $120,000 in pension contributions into an $800,000 nest egg in just eight years, we could do it, providing our investments earned returns in the range of 50 per cent each and every year. Unfortunately, no reputable investment manager offers those kinds of returns and Bernie Madoff isn't scheduled to get out of jail until 2139.
MPs don't rely on the magic of compounding to generate the kinds of returns that will keep Bev Oda living in style for years to come. They rely on the magic of taxation. Last year, Canada's parliamentarians put $4.5 million into their pension plans, while taxpayers "contributed" $110.7 million.
You see, MPs charge taxpayers "interest" at a hefty rate of 10.4 per cent annually -- set by the politicians themselves -- in addition to "employer pension contributions," bringing the total taxpayer contribution in 2010-11 to $24 for every one dollar paid by MPs into their own pension plan.
The Canadian Taxpayers Federation recently put up billboards in Vancouver, Calgary, Regina, Ottawa, and Halifax. Hundreds of CTF supporters across the country each donated $24 to make the billboards happen, their share of a national campaign to tell Canadians the truth about the MP pension plan.
Tech-savvy texters can text the word "Tax" to 212121 on their mobile device to join the fight against platinum-plated pensions for politicians, or log on to Taxpayer.com.
TOP 10 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 estimates come from the Canadian Taxpayers Federation 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.
Conservative MP Michael Chong would receive an estimated lifetime pension of $2,684,816 if he were to retire in 2015.
Conservative MP Peter Van Loan would receive an estimated lifetime pension of $2,462,029 if he were to retire in 2015. (CP)
Conservative MP Rona Ambrose would receive an estimated lifetime pension of $2,429,149 if she were to retire in 2015. (CP)
Conservative MP Rob Anders would receive an estimated lifetime pension of $3,034,089 if he were to retire in 2015. (Jeff McIntosh/CP)
Liberal MP Denis Coderre would receive an estimated lifetime pension of $3,288,821 if he were to retire in 2015. (Graham Hughes/CP)
Liberal MP Scott Brison would receive an estimated lifetime pension of $3,113,881 if he were to retire in 2015.
Conservative MP James Moore would receive an estimated lifetime pension of $2,893,658 if he were to retire in 2015. (Althia Raj)
Liberal MP Gerry Byrne would receive an estimated lifetime pension of $3,450,711 if he were to retire in 2015.
Conservative MP Jason Kenney would receive an estimated lifetime pension of $3,416,779 if he were to retire in 2015. (CP)
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)
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