I found MP Colin Mayes story in The Morning Star on pension payments very interesting.
He pointed out a pension plan proposal being made by your government for people in the private sector to be able to participate in a work place pension plan and stated that today 60 per cent of Canadians do not have a work place pension plan. He also states that with a combination of a tax-free savings account, RRSPs, CPP and the new Pooled Registered Pension Plan (PRPP), Canadians can better retire with confidence.
He concludes by saying that the PRPP has been built through cross-country consultations and that many of the provinces are eager for the federal legislation to be tabled so they can put in their side of the framework and legislation. This is indeed all positive and while it still leaves everything except the CPP exposed to the real world risk that investments can go down in value as well as up, it is a reasonable response to help address the burgeoning concern on the sufficiency of pension incomes, given what has been happening in the financial world.
Here is what he didn’t say. Of course, none of this really applies to myself and my fellow MPs.
As you know, we get a defined benefit pension plan after as little as six years of service. Our plan starts at age 55 and at a minimum of $30k/year. I also don’t have to worry about how little I put into the plan because you, the Canadian taxpayer, will pay the expected 80 per cent shortfall in my pension fund (do the math – if I collect a $30k pension for 30 years I would have had to put in $75k/year into my pension plan during those six working years.
This assumes my employer matches my contribution as in a typical defined contribution plan and I only stay on for the minimum six years to qualify, assuming no appreciation.
As per my previous letter on pension reform, our government needs to lead by example on this very important front and that is by changing their plan for all new MPs to a defined contribution pension plan. Until it does, the government’s hypocrisy of “here’s what you need to do and how we are helping” sounds hollow indeed.
In the meantime, government leaders in this regard are not on the same boat as the Canadian taxpayers they supposedly serve, they aren’t even on the same planet.
Myron Hocevar, Vernon