Thought I would do a post from this comment form Dorian Baxter:
As already indicated, if elected, I have made a legal commitment to inject half my MP’s salary back into the Riding to assist the battle against poverty. Given the fact that when all an MP’s income from all sources (including perks) is added together it is in excess of half a million dollars, I will be asking all MP’s to do the same and “lead by example”! In this time of economic hardship it is “unconscionable” to continue to “over-pay” politicians who keep voting themselves raises that generally go totally un-noticed by the general populace!
This compensation of our MPs is worthy of discussion. Mr. Baxter speaks of his “salary” (I assume that he is talking about giving back 50% of his after tax salary). But, the salary is NOT the real reason that the job of MP is so lucrative. What is the real reason?
It’s the pension stupid!!
The advocacy group says that officially, for every dollar that MPs pay into their own pension fund, taxpayers contribute $5. But the CTF says in reality, taxpayers pay closer to $23. That figure takes into account the guaranteed 10.4 per cent interest rate on the fund, which Thomas says means that taxpayers are on the hook for more than they realize.
The 10.4 per cent interest rate is guaranteed in law and because the fund is not invested in the markets, it’s not subject to the same fluctuations as most Canadians’ pensions.
“This outrageous rate means they’ve basically got the best performing pension over 10 years on the planet,” said Thomas, adding that it has outperformed the Canada Pension Plan by 60 per cent over the last 10 years.
The CTF says that the interest rate return means taxpayers are paying an additional $248,668 into the fund, per MP, on top of the dollar contribution.
$102 million to MP pensions each year
When you combine the dollar contribution and the guaranteed interest rate return, taxpayers contribute a total of $102 million to the fund every year, while MPs hand over about $4.5 million, according to the CTF’s calculations.
MPs are eligible for the pension after serving at least six years in the House of Commons and can start collecting it when they turn 55.
Thirty-nine MPs who were elected in 2006 will become eligible for the MP pension plan on Monday, and the CTF says they will be eligible for a collective $1.9 million in annual pensions starting in 2015.
In the hierarchy of pensions it’s like this. We have:
– private section pensions at the bottom
– government employee pensions in the middle
– MP pensions at the top
(And then the huge numbers of Canadians who have no pensions at all.)
The pensions of MPs provide a strong incentive for people to enter politics. The pensions are so good, that MPs should receive NO salary at all! In fact, I once heard somebody say that he was considering entering politics because of the pensions! The pension benefits are so good, that many people would do the job of MP for free. The dislike of the Harper Government has turned many Canadians into activists. In fairness, the Harper Government is proposing to reform MP pensions.
Young people are always thinking about their careers. It is natural to consider potential compensation.
There was a time when they heard: “Go west young man!”
In the 1960’s movie “The Graduate” the main character was given one word of career advice: “plastics”
In today’s world, if considering compensation, the advice should be: Go government and hope to become an MP!
Toronto Danforth needs an Independent Candidate in this election. Now that you see what’s in it for you, there should be a stampede to get on the ballot!
I applaud Dorian Baxter for offering to return 50% of his salary to the riding. I also call upon the other candidates to match his commitment!
Perhaps you should vote for the candidate that you think is most deserving of the pension?