Thursday, September 4, 2014

MHA PENSION REFORM

After 12 years of governing the fat cats in the dying Progressive Conservative Government are planning to reform the inequitable, unsustainable and unaffordable pension plan for Members of the House of Assembly.  

Don't get me wrong, I know first hand from years of working with elected representatives that there is not a pot of gold at the end of the rainbow for most politicians. They often exit politics tainted and finding other employment can be a challenge. It is often not easy to pick up one's professional career where it left off.  Providing a pension program that reflects the special kind of service performed by elected officials is critical if we are going to attract top notch individuals into the grueling life of a Member of the House of Assembly.

That said, pension reform for MHA's is overdue, if for no other reason to ensure it is sustainable.

For a nice overview of the evolution of this province's pension plan, I suggest you read chapter 11 of Justice Green's 2007 Report of the Review Commission on Constituency Allowances and Related Matters. You can find an update on the period from 2007 to 2012 in the Members Compensation Review Committee report of November 2012.

The MHA Plan has the lowest funded ratio  of all five provincial public sector pension plans. It is significantly underfunded, quite lucrative and costly. There is nothing new in these revelations. MHA Pension reform has been on the discussion block for generations, but with only a few exceptions, successive cabinets and caucuses have rejected attempts at reformation. 

In fact, Justice Green's recommendation(#78) that the services of an actuary be put in place to assist the Members Compensation Review Committee in determining if the existing defined benefit plan should be replaced with a defined contribution plan or that the existing defined benefit plan be significantly modified to conform more closely with other public service plans, was never provided. The result being that the two subsequent review committees have not been able to effectively address Justice Green's recommendation of reform.

Hearing Premier Marshall, who will retire with a handsome public pension after 12 years of inaction on the reform front, promise MHA's are next makes me cynical. 

If the government was truly committed to reform, why did they not lead by example. After all, despite being the most generous provincial pension program, it impacts a very small group of individuals.  How difficult would it have been to lead by example? They have had nearly eight years since the Green Report and two Members Compensation Review Committee's have been provided terms of references and reported.

MHA Pension reform should have been first and foremost. Instead it is last, proving the reluctance of elected officials to tamper with their own entitlements. 

It bugs me that the unfunded liability issue has not been addressed and that our elected leaders of today have no issues with asking me and my children to underwrite their comfortable retirement.

Same, Mr. Speaker, Shame!

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