Pension, payouts spark anger, agreement
Provincial and federal politicians discuss life after politics
By: By Megan Sarrazin
| Posted: Saturday, Oct 27, 2012 06:00 am
Local MLA Stephen Khan is confident the government’s committee dealing with MLA retirement packages will find a solution that politicians and constituents can agree on.
The all-party special standing committee on members’ services passed a motion Oct. 19 seeking increased contributions to taxpayer-funded RRSPs coupled with a quickly shot-down proposal to reintroduce transition allowances, albeit under a different name.
“I think it’s important to understand that it’s a non-partisan committee,” said St. Albert MLA Stephen Khan. “Their mandate is to find something that is equitable for my MLA colleagues and also something that makes sense to the taxpayers of Alberta.”
Representatives for Spruce Grove-St. Albert MLA Doug Horner said he was not prepared to comment on the proposal.
PC whip Steve Young proposed the motion, which called for a roughly $11,500 hike to taxpayer-funded RRSP contributions. The total contribution amount will stay the same – at the maximum amount of $22,970 annually – but will be solely taxpayer funded. Current contributions are split equally by MLAs and taxpayers.
The idea of reinstating transition allowances – now referred to as “severance allowances” – was supported by seven of the 11 committee members, all of whom are PCs. These allowances would see departing politicians handed one month’s pay for each year of service, capped at one year’s salary.
The remainder of the committee, consisting of Wildrose leader Danielle Smith, Wildrose MLA Heather Forsyth and NDP leader Brian Mason, voted against the proposal. Liberal leader Raj Sherman did not vote on the motion.
“I will neither vote for nor against any motions pertaining to our pay,” he said according to meeting transcripts, adding he would take a “convenient” break when the rest of the committee voted.
Khan said he has confidence in the system that a fair and equitable proposal will be made in the best interest of MLAs and Albertans alike. He did not comment on his personal feelings as to the fairness of the current proposal.
Official opposition leader Danielle Smith quickly jumped on the proposal, saying it shows how the PC government is “out for themselves.”
“They talked tough about transitions and pensions during the election but one of their first official acts is to give themselves what amounts to a pay raise on the backs of Alberta taxpayers,” she said in a statement.
Just three days after the PC committee members approved the motion, Premier Alison Redford quashed it at Monday’s caucus meeting.
During her election campaigning, she vowed to put an end to the generous payouts to departing politicians. A motion passed in May to stop the payouts.
The former transition allowance model saw former Speaker and longtime Barrhead-Morinville-Westlock MLA Ken Kowalski walk away with roughly $1.2 million when he left politics last spring.
The transition allowance awarded three months salary for every year of service, with no cap on years of service.
The federal government took a different approach to MP pensions earlier this month, deciding to cut back on taxpayer contributions.
MPs passed a bill Oct. 19 in the House of Commons putting an end to lavish pensions funded largely with taxpayer dollars.
Edmonton-St. Albert MP Brent Rathgeber said on his blog that he supports the reforms requiring MPs to contribute more of their own money into their pensions.
Rathgeber, who earns $157,731 as a Tory backbencher, refuses to speak with the St. Albert Gazette. He did not return phone calls requesting an interview.
“While these changes may stop short of being perfect, this is the most significant reform to MP pensions we’ve seen in our 22 year history,” said Kevin Lacey with the Canadian Taxpayers Federation.
The reforms require federal politicians to contribute half the cost of their pension, which amounts to nearly $39,000 annually. This compares to the previous contribution of $11,000 with taxpayers covering the remainder.
MPs will also have to wait until age 65 to collect their pension — a decade longer than the current requirement.
The changes are set to take effect after the next federal election, although many current MPs will still be able to collect their full pensions at 55.