St. John’s city councillors were right about one thing: the city’s pension rules for council members have not kept up with the times.
Monday night, council voted to change the plan, a lucrative arrangement that saw councillors contribute not one cent to a program that would then pay long-sitting members as much as 60 per cent of their salaries for, essentially, the rest of their lives.
You’d be hard pressed to find a similar arrangement anywhere else in government. Even MHAs, recipients of one of the most golden handshakes in this province, have to contribute to their pensions, even though their contributions are far below the spectacular amounts they draw out of the plan.
Under the changes in St. John’s, new councillors will be given an extra six per cent of their salary to contribute towards a registered retirement savings plan; that being said, former councillors will continue to be paid the pensions they are already receiving with funds from the city’s general revenues. It means, of course, that if you’ve managed to get elected enough times, city taxpayers get to sponsor your retirement.
The old plan allowed councillors to receive a pension equivalent to 20 per cent of their salary after holding office for two terms, 40 per cent after two terms, and 60 per cent after three. For former mayors, the dollar figures can be substantial, and the expenses will continue long into the fiscal future.
But the changes are mostly for incoming candidates.
Members now on council will be able to choose either to enter the RRSP plan or else start contributing six per cent of their salary while staying in the existing plan.
All in all, it’s a far better pension scheme than the vast majority of their constituents have access to, and it’s unlikely that the hardly surprising unanimous decision by council Monday night will see any of the incumbents choose to surrender the existing arrangement.
After all, they can argue (with some merit) that they should be allowed to receive the pay and benefits that they signed up for when they first campaigned for their positions.
They are, as former federal Liberal David Dingwall once so famously said about his pay and benefits as the head of the Canadian Mint, entitled to their entitlements, as ridiculous as those entitlements may now seem.
The simple point is that it is the right decision, years too late.
The simple truth is that it is a holdover from the days when there were two classes of citizens: those above and those below — and those below were expected to pay for the comforts of their “betters.”
We don’t live that way anymore, and neither should they.