MLA pensions getting overhaul

Teresa Wright
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Finance Minister Wes Sheridan, left, and Premier Robert Ghiz chat inside the legislature. FILE PHOTO

Provincial politicians in P.E.I. will have to contribute more to their pensions and will no longer receive guaranteed cost-of-living increases as a result of changes announced by the commission that oversees MLA pensions and pay.

After an extensive review of the province’s MLA pension plan, the Indemnities and Allowances Commission has decided to increase plan member contributions by one per cent.

This will raise the amount MLAs contribute to their pension plan to nine per cent of their salary.

Also, effective Jan. 1, 2015, cost-of-living increases, also known as indexation, will no longer be guaranteed.

Future indexation for MLA pension benefits will be provided at the same level as indexation granted to civil servants.

Last fall, the province eliminated guaranteed cost of living increases to civil servants’ pension benefits as part of a major overhaul of P.E.I.’s two public sector pension plans.

Beginning in 2017, indexation will only be awarded if the pension funds perform well.

When he first announced the controversial reforms, Premier Robert Ghiz told reporters he had sent a letter to the Indemnities and Allowances Commission, asking it to make the same adjustments to the MLA pension plan.

The changes announced in the commission’s latest report do just that, although the report does not specify whether this change was made as a result of Ghiz’s request.

The commission also raised MLAs’ age of eligibility for pension benefits from 55 to 57, effective after the next election.

The MLA pension plan is just one of two pensions awarded to members of the legislative assembly.

The second, supplementary plan offers approximately equal benefits to the MLA plan, but is unfunded. That means government covers all premiums and MLAs do not have to pay into it. 

The province is also responsible for any unfunded liability in this plan and makes payments from its operating fund as they become due, according to the 2012-13 audited public accounts report.

In its recent report, the Indemnities and Allowances Commission did not specify any changes to indexation in the supplementary pension plan. 

It did, however reduce the accrual rate on benefits from the supplementary plan by 0.5 per cent. This change will take place after the next election.

“We just received the report from the Indemnities and Allowances Commission. It seems to very similarly reflect recent changes to the public sector pension plans,” Finance Minister Wes Sheridan said in a written statement to The Guardian.

“We thank the commission for its hard work.”

Decisions by the Indemnities and Allowances Commission are binding.

Organizations: Indemnities and Allowances Commission

Geographic location: P.E.I.

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Recent comments

  • paty cakes
    March 05, 2014 - 16:42

    So this means the MLA'S will get two MLA pension, a pension from their original government job before getting into politics, and they can retire at 55. Wow, gov. employees and citizens of PEI can now retired at 67 with a small pension after 35 years of work. Hummm, something doesn't sound right there. The second MLA pension won't have any changes until after the next election, someone knows how to look after themselves.

  • Observer
    March 05, 2014 - 12:30

    This story leaves a great deal of information out it appears. Why are there 2 plans? If they are necessary, please explain the second plan. As a reader the second plan would be a no brainer to a MLA. However, with no explanation, it give the taxpayer a very poor feeling. I guess one size does not fit all.

  • peter
    March 05, 2014 - 09:56

    you can fool some of the people some of the time, but not all the people all the time. as for the majority of Islanders, is appears they love being fooled all the time, otherwise Mr. Ghiz would not be our dictator to day, ---

  • WHAT?
    March 05, 2014 - 08:34

    The MLA pension plan is just one of two pensions awarded to members of the legislative assembly. The second, supplementary plan offers approximately equal benefits to the MLA plan, but is unfunded. That means government covers all premiums and MLAs do not have to pay into it.

  • Still Can't
    March 05, 2014 - 07:53

    Still can't afford these window dressing's . The MLA pension fund for 27 members from a population of 140,000 is way out of line & needs major changes , not window dressing to fool the people into thinking they deserve any pension , let alone one after two terms . The majority of Canadians need a min of 20 years service for a pension far less than these MLA's will be getting . I think Mr. Brown's suggestion of the New Hampshire way of goverence is the way we should be going . I sure was surprised when I researched it after it was referred to by Mr. Brown . Heck , I'm retired & would only be to happy to give my services for the token amount they get paid . We couldn't do worse than we are doing now . Check it out people . Mr Brown was throwing a bluff . lol

  • yolanda
    March 05, 2014 - 07:50

    whoa, whoa, - this require some explanation, - what is this TWO plans???? - could we get some straight forward details on this, please Guardian ??????????????

  • Bs
    March 04, 2014 - 23:56

    This is a total farce!!! Their pensions should be on a percentage basis 15 years in means full pension 8 years in means half pension and so on... This would make mlas work harder to keep their seats... If you agree with this comment agree to this post and maybe the next ndp or Tory premier will put this in place after they win the next election because this bunch with be kicked to the curb by the way everybody is talking!!!! They will be lucky if they get 1 seat