Under the current scheme in Ottawa, the two MPs currently representing the county will collect a combined lifetime pension of over $3.2-million if both retired in 2015.
If the Conservative MPs put off retirement plans until 2019, that figure would climb to more than $3.45 million.
Those are two of the findings released by the Canadian Taxpayers Federation in a Jan. 18 report that argues taxpayers are being ripped off by the extravagant parliamentary pension fund.
“It’s a national disgrace,” said federation director Gregory Thomas, adding the estimates in the report are “conservative.”
Wellington-Halton Hills MP Michael Chong, qualifies for a $51,241 pension in 2015 and $70,181 by 2019.
Perth-Wellington MP Gary Schellenberger qualifies for $60,536 in 2015 and $79,477 in 2019.
The pensions are, of course above and beyond the $157,000 base salary for MPs, who are eligible to collect a pension at age 55 if they have served at least six years in Ottawa. Chong, 40, and Schellenberger, 68, meet the criteria.
The federation report also estimated the total lifetime cost of MP pensions based on the amount that would be collected until the age of 80.
Using those calculations, if Chong retires in 2015, his total lifetime pension collection would be more than $2.68 million. If Chong delayed retirement until 2019, that figure rises to over $3.12 million.
Schellenberger’s lifetime pension would be $520,317 if he retires in 2015, and $327,769 if he waited until 2019.
In addition to one-time severance payoffs of $15 million, the report estimates that retiring in 2015 all members of the federal government’s 41st parliament would cost taxpayers $11.2 million a year in pension payments, totalling $262 million by the time each MP reached the age of 80.
The federation also contends while taxpayers “officially” pay $5.80 for every $1 contributed by MPs to their pension accounts, the true amount is actually $23.30 for every dollar contributed by MPs.
The disparity lies in the government’s practice of adding “interest” into the MP pension accounts at a rate of 10.4 per cent per year – even though MP pension funds are not invested into the market like other pension funds.
According to the report, that interest results in taxpayers contributing $248,668 each year to each MP’s pension fund, while backbench MPs can contribute as little as $10,990 per year.
The government’s chief actuary said in a 2010 report that the interest rate MPs are paying themselves “is not appropriate” and should be cut by half. The actuary found the plan’s excess, or surplus, had climbed to $175 million in 2010.
“We’re putting more into MPs’ pension plans than we are paying them each year, and they only contribute $10,990 of that to this gold-plated pension scheme,” said Thomas.
He noted that during the “market meltdown” of 2008, when the Canada Pension Plan lost 18.6 per cent of its value and other plans lost upwards of 25%, the MP pension plan returned 10.4 per cent.
“I’d bet there’s a few million Canadians who would love to see a government-guaranteed 10.4 per cent annual return on their RRSPs,” said Thomas.
Treasury Board president Tony Clement has stated his review of government spending to find an annual savings of $4 billion will include reviewing MP pensions.
“Minister Clement is leading the effort to find savings across government and all options are on the table,” spokesman Sean Osmar told QMI Agency.
Recent national News reports have stated that members of all parties agree that something must be done about their lucrative pensions, but none seemed willing to suggest a means of doing that. Several stated no matter what they suggest, people will accuse them of self interest.
The CTF report can be viewed at www.taxpayer.com.
