When B.C. MLAs took back gold-plated pensions, pensions Gordon Campbell himself in the past said were "too rich," they feathered their retirement nests in a broken branch. The MLAs joined the Public Sector Pension Plan (PSPP), a plan suffering from the same demographic and financial challenges facing GM's pension plan - fewer workers supporting more retirees, and not enough money in the kitty to pay for future promises. Taxpayers, whose own retirement may be jeopardized by a fall in the market value of their RRSPs, are on the hook to cover the MLA pension shortfall. 

MLAs, and all the bureaucrats in the PSPP, aren't saving up for their own retirement; they are mostly paying the retirement benefits of current retirees in the plan. MLAs and bureaucrats have been promised retirement benefits based on their salary levels, not how much they contribute into the plan. This can't last. 

In the PSPP, fewer and fewer workers fund retirees or inactive workers (people not getting retirement benefits now but will in the future). In 2008, the ratio of active to inactive and retired workers in the PSPP was almost one to one - one worker for every retired and inactive worker, and its getting worse. At GM, there is one worker for every four retirees, and now that plan is collapsing. Luckily for Ontario taxpayers, but not for GM retirees, Ontario's premier said he wouldn't bail out the GM retirement plan. Would he have said something different if his own pension was part of that plan? 

B.C.'s PSPP is a modified pay-as-you-go system; the plan depends on contributions from current and future employees but has also accumulated fund assets (stocks and bonds) to help pay future liabilities. However, if contributions drop or the fund does poorly in the market, that unfunded liability must be topped up by the taxpayer. 

In 2008, the PSPP basic pension fund had a surplus of $487-million, however, it did have a deficit of $767-million in 2005. If MLAs, not to mention taxpayers, are worried about inflation, they should be worried about the $643-million deficit in the inflation-adjusted pension account. So just exactly who do the MLAs figure will pick up the slack for future deficits? The taxpayer, that's who. 

Although the plan was doing better in 2008, that was because contribution rates were way up, from 5.75 percent to 7.63 percent from both individuals paychecks and taxpayer contributions. Contribution rates can go nowhere but up as fewer employees pay for the retirement of more retirees. Not only that, the assets in the PSPP fund have also likely dropped off in value, undermining the fund's current surplus. 

When MLAs started feeding at the gold-plated pension trough, they took a benefit few British Columbians have and added to the burden taxpayers bear for the unfunded liability of a plan they don't belong to. It must be great to write the rules and give yourself other people's money. How long would that last if everyone did it? Probably not long. We can't all give ourselves gold-plated pensions, who would fund it? Instead of adding to an unsustainable plan MLA's should have eliminated it. Politicians cannot assume that taxpayers will step up to the plate to fund MLA pensions in the future when they have their own pension concerns. Everyone, MLAs included, need to save up for their own retirement. 

In the meantime, taxpayers, many who do not have a pension plan at all, let alone one that promises gold-plated benefits, might wonder why they contribute to MLA's gold-plated pensions. There is an election on - this question demands answers.