Information for Ontarians regarding MPP pension plans
FOR BRANT NEWS
I’m sure you have heard lately all the talk about Member of Parliament pension plans.
As the discussion was going on about MP pension plans, there has been some confusion around Member of Provincial Parliament pension plans.
When Progressive Conservative Premier Mike Harris came to power in 1995, he did away with MPP pension plans, but did replace the plans with a different system.
Those MPPs who serve more than eight years are given a payment equal to one and a half times their annual salary when they leave. Compensation packages begin at half of an MPP's annual salary.
In addition, MPPs receive a percentage of their salary each year that goes into a locked-in retirement account that they can match and direct where they see fit.
Currently, the amount is 10 per cent of an MPP's salary. One-third of an MPP's salary used to be tax-free, but that is no longer the case.
Some MPPs have had to give up guaranteed pensions in order to serve their constituents.
MPPs who served before 1995 were given pension buyouts when pensions were done away with, including premiers Mike Harris and Ernie Eves, as well as former Ontario NDP leader Howard Hampton, who served for 24 years.
Eves, who was a member of the MPP gold-plated pension plan, scored $700,000 to $800,000 when the plan was wound down in 1996 and 1997.
Those MPPs who received the pension buyouts were also eligible to receive compensation under the new system.
NDP MPP Peter Tabuns said the severance pay is “part of the package” for provincial politicians and is reasonable considering politics is not secure employment.
In a rare occurrence, Progressive Conservative house leader Jim Wilson said he agrees with Premier Dalton McGuinty that the severance package is appropriate and a cheaper option than the previous pension plan, which was replaced with a defined contribution RRSP plan.
To find out more about Ontario's pension plan for MPPs, please contact my office at 519-759-0361 or visit my website at www.davelevac.on.ca.
Dave Levac is Member of Provincial Parliament for Brant and Speaker of the Legislative Assembly of Ontario.