The federal Tories have promised to reform the MP pension plan, and such reform cannot come too soon to suit me. The current plan amounts to little more than a scam if recent reports can be believed—and I’m convinced they are believable, coming as they do from The Taxpayers Federation and Lorne Gunter of the National Post.
CAUTION: Readers may want to hold their noses before continuing.
No MP could get elected in any riding in Canada if he or she ran on a platform that stipulated a tax-funded pension for MPs based on the following formula: for every dollar an MP contributes, working Canadians must contribute $23.30. Just imagine the reception such a candidate would receive at virtually any voter’s door in the land.
Yet, the Canadian Taxpayers Federation calculates that is precisely the case with the current MP pension plan. The federal government officially claims the taxpayer-to-MP ratio is much lower at $5.80-to-$1.00, but, apparently, this is not the case. Here’s the explanation offered by the CTF:
The hidden contributions are due to the government 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 (e.g. Ontario Teachers’ Pension Fund).
According to the CTF, taxpayer-funded “interest” the government pays into the MP pensions results in an incredible $248,668 each year to each MP’s pension fund, while each backbench MPs may contribute a paltry $10,990 a year. Is it not a shameful scam for MPs to receive annual payments towards their retirement of nearly a quarter of a million dollars when their base salary $157,000?
As astonishing is the fact MPs are eligible to receive pensions of 50 per cent of their $157,000-a-year pay beginning at age 55, provided they serve at least six years in Parliament.
One reads about this sort of rip-off in banana republics run by dictators, but here in Canada…?
Read more from the National Post here.