No pension review for N.B. MLAs

New Brunswick MLAs have decided not to strike a commission to review their pension plan, two years after quietly voting themselves a big boost in their benefits.

Provincial politicians voted for pay changes in 2008 that increased their pension benefits. It wassupposed to be a temporary change pending a further review.

But the legislature committee that was supposed to launch an outside review of the pension plan has not acted on the issue.

That means the MLAs will be keeping millions of dollars in pension benefit increases without review.

'The committee does not consider it a priority at this time.' Loredana Catalli-Sonier, legislature clerk

"The committee has not discussed members' pensions at this time," said legislature clerk Loredana Catalli-Sonier when asked about the review last week.

The 2008 pension reforms boosted provincial politicians' pension benefits by 85 per cent, giving New Brunswick MLAs one of the richest political pension plans in the country.

When the legislature unanimously approved the pension changes in the spring, New Brunswickers were recovering from the near historic level of flooding along the St. John River.

And no onecould actually watch the legislature pass the bill because the flood knocked out the television equipment inside the assembly.

Veteran MLAs get bonus

The rise in retirement benefits is a result of what was at first considered a small, unrelated paychange.

MLAs hiked their base salary to $85,000 from $45,347. But, they also terminated two tax-free allowances that previously were used to supplement their incomes.

As a result,MLA pension accounts were flooded with millions of dollars because the expense allowances had not been part of the pension plan, prior to being converted into salary.

The move was recommended in an independent report by Justice Patrick Ryan, the province's conflict of interest commissioner, as part of a review of MLA compensation.

Ryan said he knew it would affect pension benefits, but suggested it would be temporary because he had also recommended an outside review of MLA pensions. But the MLAs have declined to launch the pension review.

"He [Ryan] recommended a comprehensive review," acknowledged Catalli-Sonier. "The committee does not consider it a priority at this time."

The New Brunswick plan now pays a $30,000 a year pension after eight years of service, up from $16,500and$76,000 after 20 years, almost double the previous $41,000 under the old guidelines. All pension amounts are fully indexed to inflation.

MLA pensions are the most generous in the province's public service, accumulating benefits 125 per cent faster than teacher pensions, for example.

In some provinces, MLA pension benefits are capped. In Newfoundland and Labrador, there is a pension ceiling put in at about $58,000 and in Nova Scotia pensions are capped at $55,000.

Cost jumped $1M a year

A 2009 actuarial evaluation of the MLA pension plan obtained by CBC News two weeks ago shows that benefits owed to MLAs upon retirement jumped by $4.7 million on the day pay change was made.

In addition, the cost of funding the plan grew by nearly $1 million a year.

Government currently contributes $4 to support MLA retirement benefits for every $1 contributed by MLAs.

CBC News twiceasked Premier Shawn Graham about the pension review, last May and again in October. Both times, he said he was unsure about the status of the review.

"That's a good question. I'll have to check on that for you to see where that's at, OK?" he said in May

Finance Minister Greg Byrne said "there does not appear to be an immediate appetite to move on [the pension review] at this time.

"It may be something that is undertaken in the future."