Prime Minister Stephen Harper (R) and Finance Minister Jim Flaherty (L) walk to the House of Commons to deliver the budget on Parliament Hill in Ottawa.Dave Chan for The Globe and Mail
The Harper government is planning big changes to the lucrative pensions awarded to Members of Parliament – reforms that will force MPs to shoulder far more of the burden for their retirement nest eggs.
Finance Minister Jim Flaherty hinted at this in his 2012 budget speech Thursday, saying the government would increase the ratio of cost-sharing for MPs pensions starting in January, 2013.
The Conservatives are trying to demonstrate politicians are sharing the pain in a period of austerity.
Sources say the Tories will shift the cost-sharing burden to a 50-50 ratio so that MPs shoulder half the cost of contributions as of 2016.
Members of Parliament currently contribute a relatively small portion of the cash that funds their pensions. Taxpayers officially contribute about $5.80 to the pension plan for every $1 advanced by MPs, but critics such as the Canadian Taxpayers Federation say the disparity is far worse
The Tories will begin in 2013 to make changes that shift the MP pension cost-sharing burden toward 50-50 by 2016, sources said.
Another federal election will almost certainly take place before these changes are complete.
The Conservatives are also planning other reforms of the plan that will only take effect in 2016, including raising the age at which MPs can start collecting a pension and slowing the rate at which these nest eggs accrue.
Currently, MPs qualify for a pension after six years and can start collecting at age 55. Their entitlements accrue at the rate of 3-per-cent annually to a maximum of 75 per cent of the best five years of pay.
Steven Chase