It must be a lot easier sleeping at night knowing you can never lose in your investment portfolio.
Canadians have often noted ruefully that federal politicians are eligible to collect pensions after serving a minimum of six years.
Well, add to that, their returns are guaranteed, courtesy of people who pay taxes in addition to making their own ends meet. The politicians’ pension fund reportedly enjoyed 10 per cent annual interest earnings even during the economic downturn.
A recent report on the fund for MPs and senators shows it earned a quarterly interest rate of 2.5 per cent during the 2008-09 fiscal year, adding $53.8 million to its half-billion-dollar value. Over the same period, private pension plans in Canada lost an average of 21 per cent of their value, according to the Organization for Economic Co-operation and Development.
The reason for the good fortune is the interest rate of the politicians’ fund is set by regulation and backed by taxpayers. Now those are odds you can’t beat.
And the government tells us Canadians aren’t saving enough for retirement.
As our politicians gird themselves to “fix” the Canada Pension Plan, we certainly realize the same benefit can’t apply to all. But we wonder whether those who receive royal treatment are prepared to deal with problems faced by the plebian world.
It was noteworthy in Nova Scotia’s 2010-2011 budget, released Wednesday, that among items will be a move to cap annual increases on the pension plan for public employees. This is just one of many measures being taken as the province tries to deal with a growing annual deficit and massive debt.
That kind of thinking will need to take sway in more instances, since Canadians obviously have government and services they can’t afford.
If workers in private plans and public plans are going to feel a squeeze, it’s not a stretch to expect politicians to live in the real world as well. That’s a double standard Canadians don’t need to put up with.