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

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Author Info

  • 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.

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Bibliographic Info

Article provided by C.D. Howe Institute in its journal C.D. Howe Institute Backgrounder.

Volume (Year): (2012)
Issue (Month): 146 (January)
Pages:

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Handle: RePEc:cdh:backgr:146

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Related research

Keywords: Pension Papers; Canada; pension reform; Pension Plan for Members of Parliament (MPs); federal employee pension plan;

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  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. 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.
  2. 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.
  3. 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.
  4. Joseph Doucet, 2012. "Unclogging the Pipes: Pipeline Reviews and Energy Policy," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 342, February.
  5. 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.

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