OP/ED: MLAs walk away with millions in pensions

By: Jordan Bateman, Director Canadian Taxpayers Federation

With just ten months until the next provincial election, the lifeboats are starting to fill up as MLAs of both political persuasions look to leave the ship of state. That means one thing: millions of dollars in pension payouts, primarily funded by taxpayers.

Dave Hayer was the most recent MLA to announce he won’t seek re-election next May, retiring after 12 years of elected life. The Surrey-Tynehead B.C. Liberal served for a few years as a parliamentary secretary, inflating his best three years of earnings—the cornerstone of a pension calculation.

Hayer’s annual pension will likely start with $47,600 at age 65, increasing every year to more than $62,900 annually, should he live to be 80 years old. That works out to a lifetime pension of about $824,000.

On the other side of the aisle, retiring Pitt Meadows-Maple Ridge’s Michael Sather should start with a pension of $28,500 after eight years as an opposition NDP MLA. His lifetime total will come in slightly under half a million dollars.

Former Attorney General Barry Penner, who resigned his seat last year after 15 years as an MLA, will start his retirement at age 65 with an annual pension of more than $78,500. His lifetime total will exceed $1.35 million.

Kamloops B.C. Liberal MLA Kevin Krueger’s pension, by virtue of his two extra years in office, is even larger. Krueger’s first year pension payout is likely to be $87,700, increasing every year to more than $115,700 annually at age 80. That’s a lifetime pension of about $1.5 million.

Ironically, Krueger and Penner were two of the B.C. Liberal candidates who ran against gold-plated MLA pensions in the 1996 election. Even though the Liberals lost, the NDP changed the pension rules to make it a much fairer system.

Unfortunately for taxpayers, Premier Gordon Campbell took MLAs back to the gold-plated system in 2007—even allowing MLAs to buy back benefits to the richer plan for the years they served from 1996 to 2007.

The extent of that buyback is still shrouded in mystery, and the government has refused to issue a list of MLAs who bought back into the richer plan. We do know buybacks cost taxpayers more than $20.9 million. Pension experts tell us that MLAs would be crazy—or incredibly principled—not to have bought back those years, and indeed we have heard officially of any MLA not buying back in.

Premier Christy Clark bought back her missing years, confirming that fact last year. Media outlets interviewing retiring MLAs would be well-advised to ask politicians is they bought back into the bigger, predominantly taxpayer-funded pension.

Under the current pension plan, taxpayers contribute $4 for every $1 a politician puts in.

Retiring MLAs too young to start collecting their pensions immediately are eligible for up to 15 months of salary after they leave office. If an MLA gets a job before the end of the 15 month period, the assistance is terminated—but if that job has an annual salary below $101,859, the taxpayer is on the hook for the difference. They can also claim an educational grant of $9,000.

No one is saying politicians shouldn’t have a pension, but MLA pensions should reflect the real world and go back to the 1996 NDP model—invested in a group RRSP and matched dollar for dollar by the taxpayer. That’s a competitive pension package, and fair for both the MLA and taxpayers.

The CTF is Canada's leading non-partisan citizens' advocacy group fighting for lower taxes, less waste and accountable government.  Founded in 1990, the CTF more than 70,000 supporters and seven offices across Canada.  The CTF is funded by free-will, non tax-receiptable contributions.