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Supplements to ex-deputy ministers on the rise

The number of high-ranking federal civil servants receiving a special bonus when they retire from the "stresses" of running their government departments has more than tripled in the last decade.

The special retirement allowance program for deputy ministers was introduced in 1988 at the instigation of an advisory committee that was asked to review the compensation packages of federal executives.

Between fiscal years 1995-96 and 2005-06, the number of retired civil servants who qualified for the income supplement rose to 79, from 20. And the total annual payout, which is taken directly from departmental budgets rather than from a pension plan, increased to more than $1.8-million from about $300,000.

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As the deputy-minister population ages and retires, the number of recipients fluctuates, said a spokeswoman for the Privy Council Office, which administers the benefit. The Public Service Alliance of Canada, one of Canada's public-sector unions, has taken issue with the bonus for many years. Daryl Bean, former national president of the union, wrote to the Treasury Board in 1993 to express his concerns.

PSAC's current president, John Gordon, remains unimpressed. It means "a few people are getting a benefit that's greater than the rest," Mr. Gordon said in a telephone interview. "There should be fairness across the [government pension]plan."

Under the special retirement allowance, deputy ministers are credited for two years of service for every year worked, to a maximum of 10 years. Regular members of the public service get credited one year for every year of service.

So, after 10 years, the percentage of their annual salary that deputy ministers would receive when they retire would be twice as high as the ordinary food inspector, immigration clerk or game warden.

The bonus puts an average of more than $23,000 a year into the pockets of those who qualify. Should a retired deputy minister die before his or her spouse, the spouse receives half of the bonus and each eligible child receives 10 per cent, according to documents obtained by Ottawa researcher Ken Rubin.

The supplement was recommended to the former Conservative government of prime minister Brian Mulroney by a committee headed by James Burns, the former CEO of Great West Life and the former chairman of Power Corp.

The committee, made up of eight senior executives of the Canadian business community, argued that deputy ministers who head government departments deserve the extra compensation because they serve "at the pleasure of the government and can be dismissed at any time."

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According to the documents, the special benefit "is an acknowledgment that deputy ministers are being appointed at a younger age and that the demands and stresses of such a volatile environment do not allow most of them to continue to normal retirement age." It was pointed out that provincial governments offer the same kind of allowance to senior executives.

"We would urge that flexibility be built into the plan to deal with the special needs of deputy ministers recruited from outside government in mid-life, and also for difficult situations which may arise when the government exercises its prerogative to terminate employment," the Burns committee report states.

The original plan was to create an entirely separate pension program for deputy ministers that would require no contributions from the employees. But it was decided that the process of introducing legislation to enact that program would take too long so the government opted, instead, for the retirement allowance supplements.

Mr. Gordon said he doesn't understand the arguments about the precarious nature of the jobs of deputy ministers. About 45,000 members of his union lost their jobs during the 1990s as the government downsized to cut costs, he said.

The spokeswoman for the Privy Council would not say how many deputy ministers had been dismissed between 1995 and 2006. But Mr. Gordon said that, while they get shuffled around from department to department, "I don't know that I have ever heard of a deputy minister getting fired. So I don't know where that comes from."

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