MLAs ponder enriched pension plan

Though they’ve yet to tell the public about it, since last July Nunavut MLAs have been using their behind-closed-doors caucus meetings to talk about ways of enriching their pension plans.

A source close to the legislative assembly, who asked not to be identified, told Nunatsiaq News that one option on the table could cost the government an extra $2.7 million in MLA pension plan contributions over the length of the current assembly term — or about $700,000 a year.

Kevin O’Brien, Speaker of the Nunavut legislative assembly, said the MLA pension plan is one of many matters inherited from the NWT that Nunavut MLAs need to review.

“Everything that Nunavut has, to date, has basically been inherited. We’re reviewing everything, from many of the House rules to the various laws and policies inherited from the NWT. Everything’s being looked at, so this is just another step in the process,” O’Brien said.

Any pension plan changes would require amendments to the Legislative Assembly Retiring Allowances Act.

O’Brien said MLAs won’t likely be ready to introduce pension plan legislation during their current session, which began Feb. 20, since they still have work to do on the issue inside caucus.

“I couldn’t say how much work we have ahead of us. I’d have to talk to the clerk to see where we’re at,” O’Brien said.

Caucus meetings, where many decisions are debated before they’re brought to the House to be rubber-stamped, are rarely open to the public. The final pension plan proposal won’t be available for public scrutiny until after MLAs have discussed the issue among themselves and picked the option they want.

Under their current pension plan, MLAs contribute 6.5 per cent of their earnings into a fund administered by the assembly’s Management and Services Board, also known as the “MSB.” The GN also puts money into the fund, from general revenue.

(The MSB, made up of representatives from cabinet and the regular MLAs’ caucus, oversees legislative assembly management issues on behalf of MLAs.)

Pension after one term

Documents obtained by Nunatsiaq News show MLAs are now looking at three options, prepared by a company called Hewitt Associates.

The options would see MLA pension contributions rise to either 7.25 per cent, 8 per cent, or 9 per cent of MLAs’ earnings.

In return, MLAs could get hefty increases in their monthly pension payments after leaving office — even MLAs who serve only one four-year term.

For example, if they were to choose the 9 per cent contribution option, a regular, non-cabinet MLA would be guaranteed a monthly pension of between $550 and $600 a month after serving only one four-year term — if he or she were to start the pension right away.

If the same regular MLA were to wait until he or she reaches age 60, they would be guaranteed a monthly pension of about $1,200 a month.

If MLAs choose one of the lesser contribution options, their guaranteed monthly pension cheques would decrease in size.

No matter which option MLAs eventually choose, each MLA may choose to opt out of the pension plan altogether. An MLA who does that would be barred from opting in at a later date.

O’Brien said he understands that some people will accuse MLAs of using their positions to fatten their bank accounts.

“The bottom line is that there’s never any good time for this, to bring this sort of thing forward. There will always be complaints. It’s very difficult to make the optics good on a situation like this,” O’Brien said.

MLAs suffer after leaving office?

O’Brien said many members of the public don’t understand that defeated or retired MLAs sometimes have trouble getting by.

“I know there’s a lot of guys that have served time in office and have had a very difficult time getting employment after the fact. You’re marked. Even the new ministers of the day probably don’t want you working under them in your new position because you might be a bit of a liability….” O’Brien said.

Right now, a regular MLA who leaves office after one four-year term is eligible for a monthly pension of slightly more than $200 a month. If the same MLA were to wait until he or she reaches age 60, they would be guaranteed a monthly pension slightly less than $500 a month.

Monthly pension payments would be indexed to the rate of inflation.

Under the complex system of allowances and indemnities used to pay MLAs, every member earns a slightly different annual salary, depending on how many committees they sit on or chair, and how far from the capital they reside.

That means the value of each individual pension will also vary, since pension contributions and pension payments are calculated using members’ best four earning years

Regular MLAs are paid about $70,000 a year, while cabinet ministers are paid $120,000 to $150,000 a year or more.

Monthly pension amounts for cabinet ministers, therefore, would be proportionately more generous than those paid to regular members.

NEU boss “very disappointed”

Doug Workman, the president of the Nunavut Employees Union, said he’s “very disappointed” that MLAs have chosen to look at ways of increasing the way they’re paid after they retire.

“What I’m concerned about is that, for this government, it’s been more for “me,” and more for the upper echelon of the government, and not very much for public services and for front-line workers. We’re having enormous difficulty hiring nurses, social workers, and that’s where the needs are, the front-line,” he said.

Workman said he knows that some MLAs have trouble getting work after they leave office, but he says members ought to be motivated by a desire to serve the public when they decide to run for office.

“That’s why they came into politics and why they became MLAs, to serve Nunavut and to serve the public. It’s not about feathering their own nests.”

O’Brien agrees that elected officials are often subjected to undeserved abuse inflicted by a hostile public.

“I know people who have served in public office and who have left for various reasons and have had a very difficult time. You are treated with a fair bit of scorn and disdain. That’s unfortunate because I think most members that are elected are there for the right reasons. To leave with that sort of shadow over you and to continue to have it over you is unfortunate,” O’Brien said.