Conservative caucus takes the wheel on sensitive topic of MP pensions - Macleans.ca
 

Conservative caucus takes the wheel on sensitive topic of MP pensions

OTTAWA – Conservative backbenchers don’t have much of a say when it comes to government legislation, but when it comes to the touchy subject of their pensions, it appears the prime minister has thrown them a bone.


 

OTTAWA – Conservative backbenchers don’t have much of a say when it comes to government legislation, but when it comes to the touchy subject of their pensions, it appears the prime minister has thrown them a bone.

The government made it clear in the last federal budget that it planned to boost the amount federal MPs are required to contribute to their pensions to 50 per cent, up from the current level of 14 per cent.

The MPs themselves, however, are the ones who get to craft and review the proposed changes.

A committee of about a half-dozen MPs, chosen to represent a cross-section of pension beneficiaries, was formed in the spring to go over the details.

The current proposal, a Conservative source said, would raise the eligibility age from 55 to 65 by the end of the government’s current term in 2016. When the eligibility for old age security (OAS) increases to 67, so too would MPs’ pension eligibility.

The increase to 50 per cent would not happen immediately, but gradually ramp up before 2016.

And there has been great emphasis on not disrupting the pension plans of those who have been operating under the current system. Contributions made to date would be part of one envelope that would still be available at age 55 for those who have been part of the plan. The new system would kick in if an MP is re-elected in 2016.

While there have been lots of questions, MPs recognize the pension train has already left the station.

“This is how you show leadership,” said one Conservative MP.

“It falls into a larger discussion of retirement benefits generally,” said Ontario MP Bruce Stanton.

“It’s hard to have that discussion without looking at our own pensions. These are questions that come up in the riding, and we need to have answers to them.”

With the Conservative caucus on track to make peace with the pension changes, they’re now prepared to put pressure on the NDP and Liberals to swallow the legislation. Opposing cuts to a more than generous pension plan might prove hard to justify, even if the changes are lumped into a huge omnibus bill.

New Democrat MP Charlie Angus said Tuesday he’ll wait to see the legislation, but noted his real concern is what will happen to the pension plans inside the civil service.

“We’ve been hearing from many civil servants and people who have paid into the system their whole lives, who are very concerned the government’s coming after them,”Angus said.


 
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Conservative caucus takes the wheel on sensitive topic of MP pensions

  1. No info about the value of said pension in this article? Too bad, that would provide great context. And what about the absolute value of the contributions today and in the future.

    And I assume that the pension is and will still be a defined benefit plan? If so, what’s the rationale for that? Private sector has moved to defined contribution…isn’t that the model MPs should be following?

  2. WTH? As per story on CTV this evening, I get this info:

    – 308 MPs
    – salary of about $157K
    – out of that salary, they contribute about $4.5 million per year to the pension accounts
    – other contributions from the employer amount to additional $111 million

    So, total contributions are $115.5 million, which becomes $375,000 per MP, per year.

    How in the heck are MPs going to fund 50% of that (which amounts to $187,500) out of their $157,000 salary??

    Something is fishy.

  3. Ahh, found some more info over here.

    So yeah, that MP pension plan is pretty rich indeed, even if they increase their contributions to 50%, which based on the CBC numbers would boost their contribution to about $51,000 per year, which is never going to happen, IMHO.

    And just for reference, that $4.5 million per year that MPs currently take off of their paystub and put into the pension fund works out to about $14,600 per MP. And that amount is just under 10% of the base salary. AFAIK, 10% is not an unusual amount for a private sector employer to give to employees on condition it goes into some type of (defined contribution) pension plan.

  4. I contribute to my pension every day I work and I have to work for the public service for numerous years to receive a pension about 25-35 years. What infuriates me is that the MP’s only work 5-6 years and get a full pension, why is it that us hard workers have to contribute that many more years then those in caucus!!!!