Sunday, January 22, 2012

'Freedom 55' after only 6 years?

Pensions - an MP's just desserts or the taxpayers' burden
Sunday, January 22, 2012

OTTAWA - Just weeks before Canadians find out where the Conservatives plan to slash billions of dollars in spending, some analysts are pointing to the "gold plated" MP pensions as a good place to start.

"You go into the public service to serve the public," said Ian Lee, an economist and financial commentator from the Sprott School of Business at Carleton University in Ottawa. "If you want to just make a lot of money, my answer is always the same: just go into the private sector."

Lee noted it would be difficult to find a private-sector employee who becomes eligible for a pension at 55-years-old.

In order to qualify for a pension, an MP has to be in office at least six years plus one day, and contribute seven per cent of their salary for each of those years.

So if an MP earns the most basic salary and works for six years, they would earn $28,260 when after hitting their 55th birthday .

But for any MP who serves more than six years, or who earns a higher salary because they chaired a committee, were named to cabinet or became party leader or Speaker of the House, that person ends up with a more generous pension.

For example, if Pierre-Luc Dusseault, who became the youngest MP in the House when elected in May, retires in 2019 at the age of 27, he would be eligible for a pension of just more than $40,000, according to a recent study the Canadian Taxpayers Federation published.

If Bob Rae remains leader of the Liberal party and retires in 2019, he would collect a pension of more than $96,765 every year, that same study shows.

And if Stephen Harper -- prime minister of Canada, leader of the Canadian Alliance and Conservative party -- retires in 2019, he will qualify for a pension worth more than $259,500. Bear in mind, that figure doesn't include the four years he opted out of the plan during his time as a Reform MP.

The Taxpayers Federation said their numbers were estimates based on publicly available information and data.

While those figures might seem like a generous gift from the taxpayers, Canadians should consider that being an MP means working 18-hour days, spending loads of time away from family and being under constant public scrutiny, defeated Liberal MP Martha Hall Findley said during an appearance on The West Block.

"There are a lot of people (in Ottawa) who left professional lives, me being one of them, who absolutely took a significant cut," she said, suggesting the pensions could be painted as a perk to help attract good candidates to a job that has several unappealing factors.

"An MP makes a very solid salary compared to most Canadians. Absolutely. And the pensions are good. Absolutely," Hall Findlay said. "But when we consider what a lot of those MPs have given up to be able to contribute to public service, it's significant."

The problem with that logic, Lee said, is that it assumes monetary compensation is the only incentive for anybody seeking public office.

"There's intellectual compensation -- policy. Most people don't pass laws," he said. "Three hundred and six people are controlling the lives of 33 million people."

When asked last week, Finance Minister Jim Flaherty said MP pensions don't fall under his watch, but said he expected there to be some discussion round the fund, which taxpayers pour $102 million into every year, according to the Taxpayers Federation.

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