MLAs debate pension wrap-up
Supplementary pension fund totals $19 million
NNSL (Apr 19/99) - At stake is a pension pay-out of some $10 million to be divided between 31 former and current MLAs, and what remains are lingering questions.
In the spotlight is Bill 16, a proposed piece of legislation currently working its way through the assembly and up for discussion in the Government Operations Committee.
First sponsored as a notice of motion in late March, the bill amends the Supplementary Retiring Allowances Act to end the payment of retiring allowances and benefits Dec. 1. The result is a pay-out to the 31 individuals party to the pension, based on their years of service.
That pay-out makes for an average of $322,580 per member, and the bill states recipients are entitled to be paid the actuarial equivalent of their due as of Nov. 30 and that it must be paid out either as a lump sum before April 1, 2005 or as 64 equal, monthly payments.
Yellowknife Frame Lake MLA Charles Dent explained in late March that, in many ways, Bill 16 was simply one of a dozen or more pieces of "housekeeping" legislation being dealt with in preparation for Nunavut and division.
Both Dent and Yellowknife North MLA Roy Erasmus, chairman of the Government Operations Committee, have also said that wrapping up and paying out the supplementary pension now makes sense for a number of reasons -- among them the fact that it means the fund's surplus of $9 million may come back to government coffers.
"One of the large reasons for doing it at this time is that we would get back $9 million out of the pot and into our budget, which we desperately need," Erasmus said last Monday. "Our classrooms have the highest pupil-teacher ratio in Canada, and you figure if we put $9 million into education, that would sure help, and we indicated that some of the members are from Nunavut so if in future the stock market crashes...it would mean in future this government would have to contribute to Nunavut residents' retirement."
But when the house first passed the motion on Bill 16, it did so with the opposition of four members. Those opposing the motion included Jane Groenewegen, Seamus Henry and Jake Ootes, who said they mainly questioned the timing.
"People understand this is a pension the MLAs are entitled to," said Henry at the time. "But people generally dislike politicians, and they're going to question why this is happening now when there's very little time to deal with all of the legislation we have to go through before division."
Groenewegen said Monday, "I just think it's not palatable to the members of the public for these people to get this big windfall -- what it does is it really magnifies the fact that these people have voted this in for themselves."
Ootes said more information is needed and said he was looking forward to discussing the matter in committee.
The supplementary pension act's history places the proposed pay-out in context. It was enacted in 1988 and came into effect two years later. At the time, an independent committee had recommended changes to the members' current registered pension plan.
"They already had a plan at two per cent and wanted to enhance it, and the only way was to bring in a supplementary pension of three per cent for a total of five per cent," said David Hamilton, clerk of the legislative assembly, on Thursday.
Hamilton explained that members contribute to the original, and continuing two per cent plan -- which he described as comparable to the typical, federal superannuation plan -- but that the supplementary plan was noncontributory. The government fully funded the pension.
"At the time the plan was in place, the NWT was in the top two or three in Canada as far as benefits are concerned," Hamilton said.
But he added that the pension's ups and downs appeared to follow the trend in Canada as a whole.
"At one time, with the five per cent plan, it was up there with the top plan with the House of Commons," he said, "but then all the jurisdictions started to get away from pension plans, and Alberta did away with theirs completely in 1993...offering termination packages instead."
Groenewegen said the current, 13th Assembly must, however, be given credit for having done away with the pension. When they first sat in early 1996, it was during a time of proposed government cutbacks and lay-offs of some 900 public servants, and members closed off the pension so that no new beneficiaries might be added.
"It was an election issue," recalled Ootes on Wednesday, "the public had raised it and, in my case, it was a direct challenge to those running for office."
But before wrapping up the pension, one change was made. Normally, to be eligible for the supplementary pension, a member had to have held office for a minimum of six years, but a legislation was passed to allow for the inclusion of five current members who had sat in the 12th assembly but only for a total of four years.
When Bill 16 was introduced in March, active beneficiaries included Premier Jim Antoine, Dent, Stephen Kakfwi, Don Morin, Kelvin Ng, John Ningark, John Todd and Speaker Sam Gargan. All 31 parties to the supplementary plan remain eligible for the ongoing, registered plan.
And while Bill 16 still faces discussion and a vote before it becomes law, most parties feel it is a done deal. Regardless of the public's impression, the supplementary pension did exist.
"People served as MLAs when this was in place and some of those people had absolutely no say in putting it into place, but they did accumulate that pension for themselves," said Erasmus.
"They were told at the beginnings of their terms they would receive it and they went through their terms and now they're gone, and basically they earned it."