Critic blasts N.B. 'platinum-plated' pension plan

The Canadian Taxpayers Federation is urging Premier Shawn Graham to give taxpayers an early present by rescinding the lucrative pension boost the legislative assembly gave MLAs earlier this year.

"If he wants to lead by example and he is a politician with leadership and integrity, one way to do that is to commit to reform pay, perks and benefits and make them in line with the private sector," said Kevin Gaudet, federal director of the taxpayer watchdog group said.

A CBC analysis shows some longtime MLAs will see their pensions nearly double after New Brunswick politicians voted themselves about $6 million in retroactive pension benefits.

Justice Patrick Ryan, who wrote an independent report on revising MLA salaries and benefits, recommended the change. But he told the CBC that he expected the pension boost would be temporary because MLAs would then do a broader review of their pensions.

New Brunswick politicians increased their base salary to $85,000 from $45,347. In exchange, the MLAs terminated two tax-free allowances that previously were used to supplement their incomes.

'Everyone just forgot about the cascading effect of boosting the pension plan from gold-plated to platinum-plated,' Kevin Gaudet, Canadian Taxpayers Federation

However, MLAs' pensions are based on their salary and the increase in the total wage package flowed directly through to their retirement accounts.

When the legislature unanimously passed the changes in the spring, New Brunswickers were recovering from the near historic level of flooding along the St. John River. And nobody could actually watch the assembly proceedings because the flood knocked out the television equipment inside the legislature.

Gaudet said the reforms started as an improvement by terminating the tax-free allowances, but he took direct aim at the unannounced changes to the pension plan.

"Everyone just forgot about the cascading effect of boosting the pension plan from gold-plated to platinum-plated," Gaudet said.

Political pensions should mirror private-sector plans: CTF

The Canadian Taxpayers Federation federal director said politicians should not be allowed to vote themselves a better pay, perks and benefit system and all changes should apply to future MLAs.

Additionally, he said New Brunswick should have looked to the example of provinces such as Ontario that have fixed contribution plans, which set out how much amember of the legislaturepays into a plan, such as a RRSP, and what they put in is what they receive upon retirement. Gaudet said that would mirror what private-sector pension plans resemble.

"The vast majority of Canadians have that kind of plan," he said.

To qualify fully for the New Brunswick pension, MLAs need to serve for 36 months under the new pay structure; they are already at month nine.

MLAs who have served more than 19 years in the legislature will see their annual pensions rise to $72,675 from $38,772. Liberal MLA Larry Kennedy has served about two decades in the assembly.

Veteran Tory MLA Percy Mockler would have been eligible for thejump but Prime Minister Stephen Harper plucked him out of the legislature on Monday and named him to the Senate with a $130,400 a year salary that is indexed to inflation.

New Brunswick rules make it impossible for Mockler to dip into his provincial pension while he's collecting a federal salary. However, Mockler's pension will be indexed to inflation so it will continue to grow while he is in the Senate.

And because Mockler spent nine months under the new pension structure, his pension benefit will be calculated as $2,475 per year of service instead of $2,025.