In light of Harper’s “major transformations” to the pensions of ordinary Canadians, it is time we take a look at MP pensions. MPs are eligible to take home half of their $157,000 per year salaries starting at 55 as pensions and receive benefits as long as they serve for 6 years. This is way more than the pennies any working Canadian will ever see at 65 – now imagine 67. Many more senior MPs get significantly more than that.
An MP that puts aside $11,000 per year for 6 years guarantees himself/herself $55,000 per year for life come 55.
An ordinary working Canadian “would need to save $129,000 per year over six years to provide the same retirement benefit,” according to the Canadian Taxpayers Federation.
MP Pensions that can be collected in 2015:
- PM Stephen Harper: at least $223,500 per year
- Interim Liberal Leader Bob Rae: at least $71,400 per year
- NDP MP Pierre-Luc Dusseault (19 years old): $40,000 per year if he retires at 27
- 20 MPs: more than $100,000 a year each
The Canadian Taxpayers Federation estimates you would have to pay a $23.30-to-$1.00 ratio to each MP’s pension plan while the federal government claims that the ratio is only $5.80-to-$1.00.
Even those in the best private insurance plans (contribute $6 for every $7 by employer or $7 for every $8 by employer) will never match up to a 6 year MP.
The MP Pension fund is said to be $170 million in surplus but President and CEO of the Howe Institute points out that the plan is actually $1 billion in deficit. At a 10.4% interest rate, tax payers pay an additional $248,668 per MP on top of the dollar contribution according to the CTF. As a whole, $102 million per year of our money goes to the MP pension fund which is exempt from the pension laws they imposed on the rest of us.
PM Harper said that public service pensions have started to come more in line with that of the private sector.
Finance Minister Jim Flaherty hinted that the discussion would be discussed further saying:
"I think we have to be reasonable in all of our remuneration schemes, including salary, benefits and pensions, and that applies to all of us who are in the world of public service, whether we're politicians or employed by the government of Canada as public servants or elsewhere," he said.
"I'm sure that we will have different views expressed about what is reasonable and what isn't," he said. "It's not for me as a single member of Parliament to make that determination."
However, confidence in financial prudence wanes.
"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. They need to lead by example," said Gregory Thomas, CTF federal director. "They need to put Canada ahead of their own personal bank balance."