MPs cash in on $116 million in pension and severance bonanza
By Contributor
The Canadian Taxpayers Federation (CTF) today released its calculations of estimated pension and severance payments paid to the 113 MPs who were either defeated or did not seek re-election in the May 2, 2011 general election.
Defeated and retiring MPs will collect $4.9 million in pension payments in their first year, reaching a cumulative total of $1115 million by age 80.
In addition, another $4.3 million in severance cheques will be issued to former MPs. The pension and severance calculations for individual MPs are available HERE.
“While many MPs went down to defeat last night, most are still big winners,” said CTF National Research Director Derek Fildebrandt. “Even though losing an election can be hard, MPs should find a nice soft landing with their ‘golden parachute.’”
Seventeen former MPs will gather more than $100,000-plus a year in pension income including: Peter Milliken ($147K), Gilles Duceppe ($141K), Joe Volpe ($120K), and Jean-Pierre Blackburn ($106K).
As for the biggest lifetime winners (estimated benefits to age 80) 5 MPs enter the $3-million dollar-plus club including: Keith Martin ($3.9 million), Albina Guarnieri ($3.8 million), Jay Hill ($3.3 million), Chuck Strahl ($3.3 million) and Michel Guimond ($3 million). An additional 19 MPs will receive more than $2 million before reaching age 80.
The CTF supports a reasonable pension plan and severance package for MPs commensurate with norms in the private sector. Since it’s founding in 1990, the CTF has advocated for the introduction of a matching dollar-for-dollar defined-contribution pension plan – as the CTF successfully campaigned for in Saskatchewan and Ontario.
The current federal defined-benefit pension plan requires taxpayers to cough up $4 for every $1 contributed by an MP.
“The vast majority of Canadians working in the private sector have no private pension plan of their own and those few who do, normally have defined-contribution, RRSP-style plans,” said Fildebrandt.
“Most Canadians have to save for their retirements the old-fashion way. MPs by contrast are guaranteed a steady payout regardless of how investments and the market perform.”
Defeated or retiring MPs are eligible to collect a fully-indexed pension at age 55 if they have served at least six years in the House of Commons. MPs who have not served the minimum years and receive no pension collect a severance equal to 50 per cent of their total salary.
Former MPs who are eligible for a pension but have not reached the age of 55 are entitled to both a severance and pension. If a member turns 55 years old within six months of being eligible for a pension, a reduced severance cheque is paid to them.
Lump sum severance payments range from a low of $78,866 to a high of $116,624 – a figure paid out to defeated Liberal leader Michael Ignatieff and several ministers.
Defeated Labrador MP Todd Russell was less than once month short of qualifying for his pension, being elected in a May 24, 2005 by-election.
“By keeping Mr. Todd out of Parliament, the voters of Labrador saved Canadian taxpayers almost $600,000 in pension payouts,” Fildebrandt said.
“With this shakeup in Parliament, it is time to get on with bringing MP pensions and severance in line with taxpayer expectation. With new Conservative MPs claiming to respect taxpayers and new New Democrat MPs claiming to represent low-income Canadians, they can both lead by example and get on with reforming fat-cat MP pensions.”
This article is a press release from the Canadian Taxpayers’ Federation.
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