The federation says MPs are beneficiaries of the best-funded plan in the world, with taxpayers footing most of the bill.
The group says it's time for MPs to set up a new program in which government matches their payments on a dollar-for-dollar basis.
Now, the federation says, taxpayers kick in $23.30 for every $1 an MP contributes.
And MPs only need to put in six years service to qualify and can start collecting at age 55.
The federation estimates it would cost $277 million to pension off the present House of Commons in 2015.
Gregory Thomas, the federation's federal director, said taxpayers pay more into MP pensions every year than they do into MP salaries.
He pointed out that the government wants to balance its books and is looking at the pay and pensions of the public service.
"There's no way the prime minister and these MPs can do what they need to do to balance the budget and control spending if they've got their own snouts in the pension trough," he said. "They need to lead by example. They need to put Canada ahead of their own personal bank balance."
Thomas said it's time for a much more modest pension plan for MPs.
"They should create an optional, dollar-for-dollar, matching defined-contribution pension plan, much like the new pooled registered pension plan they want all of us to adopt," he said. "If it's good enough for Canadians, it should be good enough for our MPs."