Pension and severance payouts

OTTAWA: The Canadian Taxpayers Federation (CTF) today released a list of projected pension and severance payments to be paid to 65 MPs who were either defeated in the October 14th general election or did not run for re-election. Defeated or retiring MPs will collect $52.4-million in cumulative pension payments to age 75. (Annual pension payments total approximately $3.5-million in today's dollars.) In addition, another $2.3-million in severance cheques will be issued to former MPs. The pension and severance calculations for individual MPs are available by clicking here.

"Defeated and retiring members will still win financially thanks to a gold-plated pension plan and rich severance payments for parliamentarians," said CTF Acting Federal Director Adam Taylor. "Shed no tears for retiring or defeated MPs. They will be well looked after by Canadian taxpayers for years to come."

The biggest annual pension winners - the $100,000-plus club - include former Prime Minister Paul Martin at $167,051; Joe McGuire at $131,283; Joe Commuzzi at $125,701; Bill Blaikie at $122, 224, Tom Wappel at $116,558; and Diane Marleau at 114,330.

The CTF does not oppose a pension plan for MPs. However, the organization has long advocated for the introduction of a matching dollar-for-dollar defined-contribution pension arrangement - as the CTF successfully campaigned for legislators in Alberta (MLA pension eliminated in 1992), Saskatchewan, and Ontario - as opposed to the current defined-benefit plan where taxpayers contribute approximately $4 for each $1 an MP contributes.

"The main problem with defined-benefit pension plans is that if investments drop in value, taxpayers are on the hook to cover any losses," continued Taylor. "It's no wonder MPs of all stripes have been hesitant to reform the system. Unlike average Canadians who hurt when the market hurts; the political class feels no pain."

Defeated or retiring MPs are eligible to collect a pension at age 55 if they have served at least 6 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 2008 MP salary. Former MPs who are eligible for a pension but have not reached the age of 55 are also entitled to a severance. If a member turns 55 years old within 6 months of being eligible for a pension, a reduced severance cheque is paid to them. Lump sum severance payments range from a low of $77,700 and a high of $115,961.

"With the election of a new government it is time to bring MP pay and pensions in line with public expectations," concluded Taylor. "The CTF will continue to call for the replacement of the current pension plan for MPs with a matching RRSP plan for all lawmakers."