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Fixing MP Pensions: Parliamentarians Must Lead Canada's Move to Fairer, and Better-Funded Retirements

Author

Listed:
  • William B.P. Robson

    (C.D. Howe Institute)

Abstract

The pension plans of federal government employees are relatively generous and badly underfunded, with the Pension Plan for Members of Parliament (MPs), which covers members of the House of Commons and the Senate, standing out on both counts. The MP plan promises much higher retirement incomes than most Canadians can dream of: the implied accumulation of wealth in these plans amounts to more than 50 percent of pay – with today’s very low yields on sovereign-grade securities, arguably closer to 70 percent. In addition, the plan has set aside essentially no assets to pay future benefits: a realistic appraisal of its financial condition would show, not the ‘actuarial excess’ of $176 million that appears in the latest actuarial report on the plans, but a deficit as large as $1 billion. This plan subjects taxpayers to financial risks few appreciate, and undermines the federal government’s authority to lead Canada’s search for a better retirement income system.

Suggested Citation

  • William B.P. Robson, 2012. "Fixing MP Pensions: Parliamentarians Must Lead Canada's Move to Fairer, and Better-Funded Retirements," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 146, January.
    • Handle: RePEc:cdh:backgr:146
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    File URL: https://www.cdhowe.org/fixing-mp-pensions-parliamentarians-must-lead-canada%E2%80%99s-move-fairer-and-better-funded-retirements
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    References listed on IDEAS

    as
    1. James Pierlot & Faisal Siddiqi, 2011. "Legal for Life: Why Canadians Need a Lifetime Retirement Saving Limit," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 336, October.
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    Cited by:

    1. Ake Blomqvist & Colin Busby, 2012. "Better Value for Money in Healthcare: European Lessons for Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 339, January.
    2. Alexandre Laurin & William B.P. Robson, 2012. "Achieving Balance, Spurring Growth: A Shadow Federal Budget for 2012," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 344, March.
    3. David R. Percy, 2012. "Resolving Water-use Conflicts: Insights from the Prairie Experience for the MacKenzie River Basin," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 341, February.
    4. Adam Aptowitzer & Benjamin Dachis, 2012. "At the Crossroads: New Ideas for Charity Finance in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 343, March.
    5. Joseph Doucet, 2012. "Unclogging the Pipes: Pipeline Reviews and Energy Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 342, February.

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    More about this item

    Keywords

    Pension Papers; Canada; pension reform; Pension Plan for Members of Parliament (MPs); federal employee pension plan;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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