Wednesday, May 18, 2005

Ex-MLAs leave legislature with $3.7 million

· Remnants of gold-plated pension plan continue to haunt taxpayers.
· CTF says taxpayers should be thankful for 1996 pension reforms.

VICTORIA: Based upon preliminary election results, the Canadian Taxpayers Federation (CTF) today released pension and severance package calculations for the province’s retiring and defeated MLA’s. “Defeated and retiring MLAs won’t be leaving the legislature empty handed. The 38 former MLAs will cost taxpayers $3.7 million in pension, severance and transition packages,” said Sara MacIntyre, the BC director for the CTF.

“Taxpayers should at least be thankful gold-plated pensions were reformed in 1996, otherwise the election shake-up would have much, much more expensive. But there remain a few former MLAs that are eligible for the golden handshake. The old pensions were grandfathered in for members that had been elected to the legislature before 1996. Of the 38 retirees and defeated MLAs, four qualify, Val Anderson, Lynn Stephens, Joy McPhail and Graham Bruce. Assuming the members receive benefits to at least age 75, these four pensions will total a staggering $2.1 million. As a top up, these members will also be eligible for the new pension plan,” said MacIntyre.

The pre-reform pensions were based on a 5% accrual rate per year using the average of the best three income earning years up to a maximum of 75%. The old pension was a defined benefit, that is, regardless of personal contribution to the plan; the benefit is paid out with taxpayers covering any shortfall. The new system is a defined contribution plan, where taxpayers contribute a set amount to the pension. The changes were adopted by the Legislative Assembly Management Committee in 1997 and were largely based on CTF recommendations.

Go to www.taxpayer.com to dowload the pension and severance calculations for all 38 ex-MLAs.

“The new pension and severance system is much more reasonable and in line with privately-offered packages. All members have a group-style RRSP where the legislature, aka taxpayers, contribute 9% of the MLA basic salary on a bi-weekly basis, with an option for the member to match up to 9% of their salary. If members are defeated in an election, they are also eligible for a severance package of one month per year of service and can also be reimbursed up to $5,000 for vocational training. Taxpayers certainly do their part to compensate members for their service in the legislature and to ease their transition to ‘civilian’ life,” concluded MacIntyre.

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