Panel says MLA pensions should be reduced
A report into Nova Scotia MLA pensions and other retirement benefits recommends that the rate at which a pension is earned be decreased to 3.5 per cent per year from five per cent.
The three-person review panel, chaired by retired Nova Scotia Supreme Court Justice David Gruchy, found that Nova Scotia MLAs are earning the highest retirement rates in Canada.
It found that an accrual rate of 3.5 per cent is appropriate and in the middle of the range for MLA pension plans in other provinces and territories.
But the panel also said MLAs should only have to serve two years before having access to the pension plan, instead of the current five years served in two or more legislative sessions.
The panel recommended a number of other adjustments:
- The maximum percentage of salary that can be earned as a pension should be reduced from 75 per cent to 70 per cent, which is the maximum available under a regular Nova Scotia public service pension.
- The number of years an MLA must serve to be eligible for a full pension should be increased from 15 years to 20 years.
- The earliest age at which a retired MLA can begin collecting a reduced pension should be raised from 45 years to 50 years of age.
The report was released Thursday at Province House.
In conducting the six-month review, the panel compared the MLA Pension Plan with the Nova Scotia Public Service Superannuation Plan, taking into account the difference in years of service.
The public service plan is based on a career much longer than that of an MLA. Pension plans for MLAs in other jurisdictions also take into account this shorter term of service to arrive at a reasonable benefit formula.
The review panel also looked at the structure of MLA pension plans and retirement benefits in other provinces and territories.
The panel also learned there are 11 former MLAs or surviving spouses who are over the age of 65 and receiving very small pensions for service before salaries were increased, and recommended that there be a minimum pension of $1,000 per month.
The panel commissioned a report by actuarial consulting firm Morneau Shepell to guide the review. It also received 50 submissions from the public by email and 11 submissions.
Kevin Lacey, Atlantic Canada director of the Canadian Taxpayers Association, said he's disappointed with the report and hopes the government scraps it.
He said the plan will still be too rich, and he's particularly upset with a proposal to allow access to the pension plan after being elected for only two years.
"The two years is crazy, speaking frankly," Lacey told reporters. "I don't even know what other way to put it."
"I mean, it's ludicrous when you think about the situation that the taxpayers are facing in this province. I think the one out here is that Premier [Darrell] Dexter could do the right thing, and the politicians in the Liberal and Conservative parties can take a leadership role and say no and do the right thing on these recommendations," he said.
The provincial MLA pension plan now allows politicians to begin collecting a pension after five years in office and allows veteran MLAs — those who have worked more than 15 years — to receive up to three-quarters of their salary.
The taxpayers' federation reviewed the plan and found that for every dollar a politician contributes in Nova Scotia, taxpayers chip in $7. If interest is factored in, the federation says taxpayers chip in closer to $22. In total, the federation says MLA pensions cost taxpayers approximately $11 million each year.
The panel believes politicians have demanding and short careers and therefore deserve a reasonable pension.
"Given the type of service they provide and the implications on their lives, it's a matter of opinion," panel member Ron Smith said.
Frank Corbett, deputy premier and 13-year MLA is eligible for a yearly pension of more than $60,000, and that number is climbing.
"It is what it is," said Corbett. "I've been here for some time and everybody else that has the same time in as I have and work at the level. It is what it is."
The report is just a recommendation that wouldn't go into effect until after the next election. It's up to the provincial government to decide if it will be passed into law.