Newly-elected members of the House of Assembly in Newfoundland and Labrador could be moved out of their defined benefit pension plan to a defined contribution pension plan instead.
On Monday, the Liberal caucus chair Randy Edmunds sent a letter to speaker Tom Osborne suggesting the province’s House of Assembly Management Commission explore moving to a defined contribution pension for members elected on or after Nov. 30, 2015.
The move, according to the letter, could have an approximate $5.2-million reduction in the province’s aggregate liability, “whereas the recommendations pertaining to pensions by the Members’ Compensation Review Committee represents an approximate $3.6-million reduction.”
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The Members’ Compensation Review Committee’s review of MHA salaries, allowances, severance payments and pensions, which was published in November 2016, recommended moving to a revised defined benefit pension with no portability and no indexing component. It would also only be available at 60 years of age without a delayed retirement option.
The province’s House of Assembly Management Commission met on Monday and a notice of motion was provided, says Osborne, noting the motion is now on the agenda to be debated at the next meeting, which will take place some time next week.
“If the motion is carried, the clerks’ office will then, with the assistance of the pension division of the Department of Finance, put together information for the commission detailing the implications of moving from a defined benefit to a defined contribution, the savings potential,” he says. “The letter I received indicated that the savings to government would be considerably higher than the MCRC report with their recommendations.
“If the commission votes to accept the motion, amendments would have to be brought to the House of Assembly for debate and then resolution.”