Conservatives back hike in MP pension contributions

The Conservative caucus has accepted a government proposal that would ease the burden on taxpayers by more than tripling how much members of Parliament and senators kick into their pension plans, CBC News has learned

Currently, MPs and senators contribute around $11,000 a yearto their ownpensions, while taxpayers addabout $64,000for eachpension plan.

Under the proposal, it would be a 50/50 split, CBC's national affairs editor Chris Hall reported.

A 50/50 contribution split would bring the parliamentary pension plan in line with changes being implemented for the federal public service.

If the pension plan'sbenefit levelsdo not change,politiciansmay need to contribute close to a quarter of an MP's current salary to meet taxpayers halfway. At current benefit levels, parliamentarianswould have tocontribute around $38,000 a year, a jump of more than $25,000 from what they pay now.

Alternatively, the benefits payablecould become less generous.

Hall said it's still unclear whether eligibility rules could change, such asincreasing howlong MPs will have to serve from six years to eight, or if they will have to collect their pensionslater at age 60, as opposed to 55.

A change in eligibility rules could also affect the amount serving parliamentarians need to contribute to the plan.

Thepay freezeon MPs and senators salaries may end, but it's unclear how much salaries might rise to compensate for greater pension contribution requirements.

The changes are expected to take effectin the next Parliament, affecting MPs andsenators who start in 2015 and beyond. Thosealready serving would not see their pension eligibilitychange.

Contributiondisparities under current plan

A study by the C.D. Howe Institute last January found that in 2011, the taxpayers' share of contributions to the plan was more than six times the amount paid by MPs into the plan.

Numbers released last June by the Canadian Taxpayers' Federation tallied an even greater disparity in who bears the brunt of the costs: the taxpayer watchdog believes the public contributes more than $24 for every $1 contributed by MPs.

Under the current system,parliamentarians contribute seven per cent of their gross salaries to the pension plan. The pension pays out three per cent of this average of their best salary per year of service.

Many observers consider the current pension payouts very generous.Each MPmakes just under $158,000 a year andafter six years of sitting in the House,each qualifies at age 55for a pension based on the average of his or her best five years of salary.

Assuming the minimum six years of service at the current $158,000 annual salary, a backbench MP stands to receive a pension of more than $28,000 a year.

Long-serving parliamentarians or those who earned higher salaries, such as cabinet ministers, receive much more.

Figures from 2011 suggest there are 59 former MPs and senators who receive more than $90,000 a year each. The average annualpension is $60,599 for former members of the Senate and $55,102 for former members of the House of Commons.

The parliamentary pension scheme changed significantly in the early nineties. Not every former MP, or senator or their survivors receives benefits at these levels. Sixty former parliamentarians, or spouses and dependents of former parliamentarians, received benefits of less than $15,000 in 2011.