Are MLA Gold-Plated Pensions Coming Back
Author:
Sara Macintyre
2007/02/08
British Columbia MLAs are putting the old adage, "If at first you don't succeed, try, try again," to the test in an effort to boost their pay and pension benefits. Shortly after the 2005 election, the opposition NDP and governing Liberals hatched a backroom deal to boost their salaries, resurrect gold-plated pensions and hike their constituency office budgets.
After a weekend of public disgust and outrage, the leader of the NDP backed out of the pocket lining deal, and the issue was dead in the water. Or, so we thought. A special "Independent Commission of Review" has now been established to review and recommend changes to MLAs salaries and-wait for it-pensions!
This is not a citizens' review panel as appointed in 1996 but a three member panel made up of a BC Supreme Court Justice, a professor from the University of British Columbia and a labour relations lawyer who also sits on the Insurance Bureau of British Columbia's board. These appointees hardly reflect the average British Columbia taxpayer. Two of the three are employed in the public sector and themselves enjoy hefty pensions.
The Commission has a mere 90 days to collect data, review the current MLA compensation package, consult the public and report to the Speaker. The legislature will vote on recommendations in the spring.
And although the Commission is "independent" in the sense it not made up of MLAs, it can hardly be described as transparent. The terms of reference do not require the Commission to have open hearings or make available any of its proceedings. And it has yet to announce its process or mechanism to gather public input.
Currently the base salary for an MLA is $76, 100. There is an additional allowance of $39,000 for cabinet ministers, the speaker and the opposition leader. The premier receives an additional $45,000 annually. Considering that the average weekly wage earnings in BC works out to just under $37,000, our politicians are doing just fine.
Compared to other provincial legislatures, salaries for British Columbia MLA fall in the middle range. Thanks to the sensible 1996 citizen's panel on MLA remuneration, salaries are transparent and fully taxed, gold-plated pensions eliminated and a yearly formula exists to adjust salaries.
But the benefits don't stop there for our MLAs. After the welcome end of the gold-plated pension scheme in 1997 MLAs were provided with a group RRSP, similar to what's offered by many private sector employers. However, there are some extra perks for the MLA group plan. Every year the legislative assembly (the technical employer for MLAs) contributes 9 per cent of the basic MLA salary to the RRSP. The MLA can then voluntary match that 9 per cent. Regardless of whether the "employee"-MLA-contributes to the plan, the employer automatically puts in 9 per cent of their basic salary.
That type of group RRSP does not exist in the private sector, it's only for politicians. In fact, recent statistics show that on average, employers contribute or match between 50 and 100 per cent of an employee's contribution. And, the average amount is between 3 and 5 per cent of the annual salary.
To be sure, the work of our MLAs is important, draining, tough and sometimes thankless. Family and career sacrifices are par for the course. The CTF could support a reasonable increase in the base salary for MLAs and perhaps updating the formula to determine annual increases as well.
But let's be clear: Any back door attempt to bring back gold-plated pensions will be met with strong opposition.
Under these schemes-which have been abandoned across the country including BC in 1996-it is the taxpayer who bucks up almost all of the pension benefit. There is little contribution by the MLA. The plan scrapped in 1996 had taxpayers cough up $5 for every dollar contributed by the MLA! Many former MLAs left office with multi-million dollar, lottery like benefits.
BC MLAs already enjoy a group RRSP that is far more generous than found anywhere in the private sector. Our politicians are well rewarded for their service upon retirement, there is no need to review or change the current pension plan. The CTF is urging the government to take pension changes out of the Commission's mandate entirely. For the next 90 days, the CTF will be reminding our MLAs what they said in opposing gold-plated pensions in the past and asking what's different now