Many federal politicians who decide to retire at the next election are set to walk away with millions of dollars from the lucrative parliamentary pension plan.
 
With a cabinet shuffle expected soon, some federal cabinet ministers have announced they won’t seek re-election and MPs from all parties are considering their political futures.

Public Safety Minister Vic Toews, Minister of State of Foreign Affairs Diane Ablonczy, other original Reform MPs, longtime Liberal MP Ralph Goodale and New Democrats Pat Martin and Peter Stoffer are among the MPs who could take home at least a couple of million dollars over their lifetimes should they retire in October 2015 (the next expected election) and live until age 90, according to the Canadian Taxpayers Federation.
 
The total payouts could, however, be much smaller depending on the lifespan of individual MPs and when they actually retire. A number of MPs such as Toews, Goodale, Martin and Stoffer have not said they are retiring.
 
The spending watchdog, invited to do the math by Postmedia News, calculated the pension plan for members of Parliament and senators will pay many longtime MPs more than $100,000 a year for the rest of their lives. Indexed to inflation, the plan will pay millions of dollars each to MPs should they live until age 90 (the average life expectancy of MPs in the pension plan, according to the government’s own actuary).
 
“We just don’t believe that Canadians get good value for this pension plan,” said Gregory Thomas, federal director of the Canadian Taxpayers Federation.
 
“Politics shouldn’t be a vehicle for an individual to get rich and become a multimillionaire. Politicians shouldn’t be working for peanuts, but I don’t think most Canadians are aware of how lucrative these pension schemes have become.”
 
Cabinet ministers are paid higher salaries and accrue larger annual pension benefits than backbench MPs, meaning their yearly and total payouts are generally larger.
 
The federal government recently adopted changes to the parliamentary pension plan — including tripling MP contributions and increasing retirement age — but these take effect after the next election.
 
Under the reforms adopted by the Conservative government, annual pension contributions for MPs will increase to nearly $39,000 by 2017 — from about $11,000 currently — bringing parliamentarians’ contributions up to a 50-50 split between the government and the individual MP.
 
The significant hike in MP contributions will likely have some federal politicians reconsidering whether they want to seek re-election in 2015, having to give up a significantly larger portion of their paycheques after that.
 
Those parliamentarians who do call it quits will have a golden parachute on their way out the House of Commons doors.