Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Thursday, January 19, 2012

MP pensions 'a ripoff on a massive scale'

Taxpayers put in $23.30 for every $1 members contribute to provide 'outrageous' returns, advocacy group says


The Canadian Taxpayers Federation says it's high time MPs stopped making Canadians pick up the tab for their "gold-plated" pension plan.

"This is a ripoff on a massive scale," the advocacy group's federal director, Gregory Thomas, said at a news con-ference on Parliament Hill Wednesday announcing its report on parliamentarians' pensions.

The federation says while officially taxpayers contribute $5.80 for every dollar an MP contributes to his or her pension, that figure does not include "disguised 'interest' and accounting fiction." Its calculations say taxpayers are actually on the hook for $23.30 for every dollar an MP contributes.

While MPs earn a base salary of $157,731 per year, the total contributions to the parliamentary pension fund amounts to $248,668 per year, Thomas said.

MPs are eligible to collect full pension benefits when they are 55, if they sit in Parliament for six years or longer. If all current MPs collected their pensions, Thomas said, the total lifetime payout would amount to $277 million.

Thomas said the MP pension fund does not invest in the market like the Canada Pension Plan or RRSPs. Instead, it dips into public coffers each quarter.

"The government simply passed a decree paying interest to the MP pension fund, and at a staggering rate. This outrageous rate means they have basically the best-performing pension over 10 years on the planet."

Insulated from market forces, Thomas said, the MP pension fund has done 60-per-cent better than the Canadian Pension Plan over the past 10 years. "The 'return' on this fund is set by cabinet. But it's a phoney return on an imaginary investment."

Treasury Board President Tony Clement said he is examining the issue of MP pensions as part of the larger government-wide spending review. He said the government's first step was to freeze MP salaries.

"I've been tasked to come back with some options on MP and public service pensions, and I will be doing so," he told CBC News. "These options are on the table."

Clement said no decisions have been made, but alluded there would be some announcement on MP pensions in the next budget.

The Opposition says Parliament has better things to do than tinkering with MPs' pensions.

"There are just too many other things that need to be addressed in the pension field specifically," said NDP MP Joe Comartin.

He said the government is beating the MP pension drum to distract the public from its lack of action on pensions that directly affect Canadians.

"This is really a smokescreen for the government not to act on the other ones, such as reforms to the Canada Pension Plan," as well as looking after Old Age Security and the Guaranteed Income Supplement, he said.

Liberal MP Rodger Cuzner said Canadians should be wary of the taxpayers federation, which he described as a "branch office of the Conservatives" and "so deeply entrenched in (the) digestive tract of Tories that it's embarrassing."

He noted that senior Tories, such as Immigration Minister Jason Kenney, and others got their start in politics at the federation.
Cuzner said it's strange the group launched a full-scale attack on parliamentary pensions, but stayed silent on accountability issues such as G20 spending or the untendered F-35 stealth fighters contract.

"Obviously, this is something to shift the attention of Canadian taxpayers," he said. "To trot out the old faithful pension plan, it seems to be just the thing to do by these guys."

Opposition MPs said it was the government's job to make proposals on how to fix MP pensions, if they need fixing at all.

"As our leader, Bob Rae, said back in November, we're happy to look at any proposal the government brings forward," said Liberal MP John Mc-Callum. "MPs should set an example during a time of austerity."

Comartin said if the issue is to be examined, the government should appoint an independent commission to adjudicate the issue.

"If there is going to be a review of the MPs' pensions, it has to be done by an independent commission, as it has been the last two times," he said. "It takes partisan politics out of it."

Finance Minister Jim Flaherty said Canadians expect their politicians to be reasonable in how they fund their pension plan.

"Pension remuneration for people in the public service, and public service in Canada ought to be - including members of Parliament, including senators, including everybody in public life, including provincial politicians, including mayors, including councillors - ought to be reasonable, and the test of reasonableness requires a review of these types of systems," he said.

"People of Canada expect us to be reasonable in the pension compensation and the other compensation that is received for benefits and for salaries as well."

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