A year in politics, they say, can be a lifetime. But a few years in politics shouldn’t entitle Nova Scotia’s MLAs to a lifetime on the public payroll. As it stands now, with as little as five years service a retiring or defeated Member of the Legislative Assembly could start collecting a pension as early as age forty-five. A government minister with just fifteen years service could draw more than $100,000 each year for the rest of his or her life. If they are still serving at age 71 they could even collect that pension while receiving their paycheque.
For sure, political duty can be an onerous calling and our MLAs are entitled to reasonable compensation for their service. But it should not be a primary motive for seeking election. The driving force should be a willingness to serve their fellow Nova Scotians.
Legislative office is rarely lifelong employment. Most politicians have already-established careers before seeking office, and many return to private business with an augmented resume afterwards. At the federal level, the average term of all our Members of Parliament since Confederation has been just eight years.
MLAs are essentially contract employees, hired for a specific task for a limited term. As such, they have a right to know the terms of remuneration—and their employer, the people of Nova Scotia, have an equal right to know how much their services will cost. An open-ended diamond studded lifetime pension for a few years of public commitment is too high a price.
There is another reason why current MLA pension arrangements should be scrapped. Public sector pension plans are becoming increasingly strained. Years of pay-as-you go benefit payments and classic underfunding are about to collide with the realities of financial market uncertainty and population aging. How will our legislators be able to resist demands for taxpayer bailouts of those programs when they, themselves, enjoy platinum benefits almost entirely at public expense? Most Nova Scotians have no pension plans—even those who have spent decades with a single employer. Their retirement incomes are dependant upon their personal savings, including RRSPs, CPP and Old Age benefits. Public sector employees generally fare much better—in fact more than half of current registered plans are now in the public sector. The public-at-large looks with envy at the provisions of these inflation-indexed plans that are simply too expensive for private sector employers to even contemplate. The generosity of MLA pensions surpasses even these.
The government has established a committee to review the appropriateness of the current terms of MLA pensions and their report will soon appear. To arrive at their recommendations, the committee should have looked well beyond this narrow mandate and taken into consideration the total remuneration of members. In addition to their base salary, MLAs are entitled to compensation for additional responsibilities and to a range of per diems for either attending the House or visiting their constituency. Hopefully now no longer subject to the rampant abuse revealed in the “expense scandal”, MLAs are also entitled to reimbursement for reasonable expenses that some would still judge as perks.
The committee set as its mandate the objective of identifying the level of pension benefit that: “should not be so small as to discourage qualified persons from running, or so generous as to be a major inducement for seeking office.”
To arrive at their conclusions they should also have taken note of the level of responsibility—recognizing that several Canadian cities have a higher population than the entire province. Another key factor should have been our ability to pay. On average, Nova Scotians receive significantly lower incomes than in wealthier provinces like Alberta. If we receive Nova Scotia wages, so should our legislators.
A comprehensive assessment of how we compensate our MLAs is urgently needed. As for the pension portion, the commission should give considerable thought to recommending the elimination of Members’ defined benefit pensions entirely. They are simply not warranted and they contrast sharply with the retirement circumstances that the majority of taxpayers face. Alberta moved to matching RRSP contributions as a means to bring MLA compensation practices more into line with those experienced by the people they represent, that model would make even more sense here.
Don McIver is Director of Research at the Atlantic Institute for Market Studies. His recent analysis of MLA pensions is available at www.aims.ca