OTTAWA — The country's waste watchdog claimed victory Thursday after the government moved to trim some icing off platinum-plated MP pensions and sugar-coated public sector plans.
While the government was promoting its long overdue overhaul as "landmark" and "sweeping," the Canadian Taxpayers Federation (CTF) said the changes are "a significant win" for ratepayers.
Under the reforms announced by Finance Minister Jim Flaherty, new MPs could still become rich in retirement, but would have to wait until age 65 before the gravy starts flowing.
The proposed changes would be phased in over five years.
Sitting MPs with six years on the job could still collect their pension at 55. MPs with less experience could also tap into their plans at 55, but would get a reduced benefit until 65 when the full pension kicks in.
To put the excess of the existing plan in perspective, former Bloc leader Gilles Duceppe banks about $141,000 a year after spending almost 15 years in Parliament fighting for the breakup of Canada.
Under the current plan, which has been criticized as obscene and grossly out of whack with private and public plans, each MP contributes $11,000 a year to their pension and taxpayers chip another $68,000.
According to the changes introduced Thursday, MPs would pay just under $39,000 per year by 2017 and taxpayers about $40,000.
The CTF says that would work out to about $1.62 for every $1 contributed by an MP — short of a 50-50 split with taxpayers.
"While these changes may stop short of being perfect, this is the most significant reform to MP pensions we've seen in our 22-year history," said the CTF's Kevin Lacey.
The federation estimates that a new MP elected after 2017 would be eligible for a $101,000 pension after three terms.
The government also changed public sector plans by hiking the age of eligibility to 65 from 60 and incrementally changing the cost-sharing ratio between taxpayers and workers from 63-37 to 50-50 by 2017.
Together, the government says the pension changes will save $2.6 billion over five years.