MHA pensions may be higher than salary

FOR IMMEDIATE RELEASE
October 7, 2011

MHA pensions may be higher than salary

Everyone knows about the gold-plated pension plan that allows Members of the House of Assembly to retire in the lap of luxury.

However, few realize there is another, separate retirement plan – funded by taxpayers – that has additional perks not available to other pensioners.

“MHA’s are eligible for two retirement allowances,” said Ralph Morris, President of NAPE Retirees Local 7002. “The public is aware of one, which is paid from the Pooled Pension Fund. The other is unknown, but it certainly does exist. It’s called a Supplementary Allowance, and is paid from the province’s general revenue.”

In other words, one pension is paid by current and former government employees (including MHA’s), from their pension contributions, and the other by taxpayers. This is unacceptable to the Pensioner’s Coalition, Morris said, given government’s intransigence around pension reform.

“We have been researching these plans for years now, consulting with staff at the province’s Pensions Division,” said Ralph Morris. “At one time, both pensions were governed under separate pieces of legislation, which enabled MHA’s to receive both at once, for potential pension income of 150 percent of salary. However, in 2009, both pieces of legislation were merged into one, with the addition of wording that supposedly prevented MHA’s from receiving both at once – except at the Minister’s discretion. This discretion still leaves the plans open for abuse.”

There are many questions that remain unanswered, because staff of the Pensions Division are not returning calls. “We gave Minister Marshall questions to be answered some time ago,” Morris said. “He gave them to staff, who told us they have the information but had to pass it by the Minister first. However, we have not received any of those answers. It would seem that Government has locked down information on this, knowing it could prove embarrassing in the final days before an election.”

In light of this information vacuum, the Pensioners’ Coalition has some questions for the Minister of Finance.

“How many, if any, former MHA’s are receiving benefits from both plans?” Morris asked. “How much are they receiving? Have any MHA’s benefited from both plans, since the Progressive Conservatives came to power in 2003? Has the Minister used his discretion in awarding these pensions, since the legislation was amended? If so, to whom and why?”

For further information, contact:
Ralph Morris, President, NAPE Retirees Local 7002 – 725-6779
Sharon Callahan, President, NLPSPA – 690-1239

BACKGROUND

Retirement Allowances for Members of the House of Assembly
(Members of the House of Assembly Retiring Allowances Act,  SNL 2005, Chapter M-6.1 amended)

FACT: When Government refused to make contributions for workers, Public Accounts show Government continued to make contributions for Members of the House of Assembly from 1967-1976. Why this double standard?

FACT: Members of the House of Assembly have changed the language of “pension” for themselves to “registered allowance” and “supplemental allowance”, declaring eligibility for both allowances subject to the approval of the Minister of Finance;

FACT: The Registered Plan for the Members of the House of Assembly is paid from the Pooled Pension Fund and the Supplementary Plan is paid from the general revenues of the Province;

FACT: Government has legislated that any monies owing to the Registered Plan (Pooled Pension Fund) on behalf of MHA’s shall be paid from the revenues of the Province, on approval of the Minister of Finance, where there is a shortfall on the cost of benefits;

FACT: The Registered Plan benefits for MHA’s are subject to clawback in accordance with integration of the Plan with the Canada Pension Plan; the Supplemental Plan has NO clawback;

FACT: MHA base salary, any base Ministerial Service, and any other service are calculated together as pensionable for pension purposes;

FACT: MHA base salary and Ministerial salary for purposes of pension calculation are based on highest three (3) years, whereas public sector workers are based on best five (5) years;

FACT: An MHA/minister participating in the Registered Plan reaches his/her maximum contributions after 17 years, if serving before or during the 43rd General Assembly; if after the 43rd General Assembly, after 20 years service;

FACT: According to section 4(2) of the legislation, it would appear as if members who retired before December 31, 2003 and were in receipt of an allowance under the Act, that allowance and any related benefits payable under this Act shall be paid from the Supplemental Plan (this payment is covered by consolidated revenues, i.e. taxpayers dollars);

FACT: The Supplemental Plan permits the Minister of Finance, subject to Cabinet approval, to credit pensionable service as an MP Canada or Minister in the House of Commons;

FACT: The House of Assembly Retiring Allowances Act applies the definition of Minister to the Speaker of the House and the Leader of the Opposition.

WHY is the Pensions Division of Government refusing to answer questions from an official representative of a legitimate organization representing pensioners in the Province of Newfoundland and Labrador, without the approval of the Minister? Have they been shut down because an election is going on? Pensioners want answers. They will not stand down until they get those answers.