Exactly the same way every other Canadian has to do it. Instead I was bound to put 11 per cent in there. It will pay me 4 per cent interest. With mutual funds, if I had been investing that $600-odd dollars a month, I could have been getting back probably 9 per cent or 10 per cent. I would have been sheltered from paying taxes on it now. I would be glad to pay taxes on it later; it is the way the regular RRSP plan works in this country. I would have been able to put all of that money in, but instead I was bound by law. Now I have the option. Now I am taking that option, although it does seem a little ridiculous that the government will not even pay $1 to $1 contributions.
Apparently to compensate members for the minuscule reduction in their future benefit accrual rate the government has also lowered the amounts members contribute toward their own pensions. The minister mentioned that. He said that instead of 11 per cent we will now be putting in just 9 per cent.
There has been all kinds of talk about whether or not it raises the salary of an MP. I will not argue about those figures. If I am not putting in eleven and I am putting in nine that gives me more disposable income. There will be more cash on my monthly cheque.
Let us think for a moment about reducing accrual rates from 11 per cent to 9 per cent, what I would have received if I had opted into the pension and what I might have received if I opted out. I want to look after my own money, my own retirement. I do not want to be dependent on the government. When I am older I want to look after myself with RRSPs. I do not even want to be a burden to the government if I am younger and collecting the MP pension plan that is so rich and generous.
If I had been given the option of taking the $600 a month that I have been putting into the MP pension plan and putting it into my own retirement plan, I could have put in $600 a month from 1989 to 1997. Let me use that nine-year period. What would happen if I had put $600 a month into private RRSPs, mutual funds, rather than into the MP pension plan? Age 75 is the average lifespan. Many people have calculated the average age to be 75 and how much they would get by age 75 with inflation at age 60. If the variables correlate to each other on par and I were to collect about 7.5 per cent interest, which is reasonable and fair, I would collect $663,900.
If I put $600 a month in for eight or nine years and let it sit there accruing interest I would get back at age 75 about $664,000. If for some reason I was particularly lucky and obtained a 10 per cent rate I would stand to gain $1.29 million. Under the pension plan that the government is putting in $3 or $4 to $1, I would stand to gain about $1.2 million.
This is hypothetical because I had to put money into the pension plan. I would collect about half what I stand to gain under the new plan if I put the money into RRSPs. It is no fun to collect only half. I do not think any member in the House would ask: "How stupid do I look?" Is it more fun to collect $1.2 million or $660,000? Obviously whatever we get we could live into that income, but the fact remains that the $664,000 I invested, that somebody went out and invested on my behalf, would be my money. At the grand old age of 75 I would be able to collect that money and say: "I did this. I looked after myself. I was not dependent on government and I feel good about that".
I would have a hard time collecting the MP pension plan. I would feel a little guilty spending the money because it was not my money, because I did not earn it myself or look after myself financially.
According to the Treasury Board, members will now contribute $1 for the $3.61 taxpayers contribute. That number was a lot richer in the last Parliament. It seems as though there was a great sweep of this place in 1993 and a lot of the older members left. There are many new members in the House right now. That is the largest reason. We were told by Treasury Board-it is not some figment of my Reform imagination-that it would be $3.61 to every buck we put in. It looks better. It looks more noble. It looks like there is a real saving but it has nothing to do with any nobility on behalf of the government.
It has to do with the fact that generally there are more new members in the House. That is what we were told in the briefing by the department. The government pays a generous rate of interest on this account, which is a cost to taxpayers but which is not included in the total cost of the plan that the government admits to.
My point is that in the public accounts of 1993-94 last year they paid interest on $23 million. That is kind of scary because it goes into government expenditures. At the same time it does not specifically look like it is paying the MP pension. It is just amazing. They are spending $23 million on interest and it is nowhere in the budgetary figures.
Many members on the opposite side of the House have spoken both during their election campaigns and later in the House on the need for changes to the plan. I do not mean to be critical at all. In fact I applaud the member for Lambton-Middlesex who indicated to her constituents during the election campaign that the MPs pension plan should be, and I quote from Hansard , ``more fair to the general public's pension plan''. I applaud her for that. It is terrific.
Similarly the member for Waterloo indicated in the House that during the campaign he supported the minimum age of 60 years. The member for Ontario said that he would opt out of the plan. This is not something we are trying to make our issue. It should be a totally non-partisan issue. We are talking about cash and not politics. It will cost money. Anyone on both sides of the House who has the nerve should be rewarded and applauded for opting out of the program.
Let me conclude my remarks by saying that the signal the bill sends is more important than anything else. It seems unfortunate to me that the signal being sent is that we are reducing the fat a bit, that we are sacrificing an incredible amount for the country but we will still take a lot more cash than anyone who is buying into a private pension plan.
This is unacceptable to us. We applaud the government for bring in the bill. I am sorry to say it is not good enough. It will not withstand the test of fire by the people who are paying the bills for it. Therefore I move:
That the motion be amended by deleting all the words after the word "that" and substituting the following therefor:
That Bill C-85, an act to amend the Members of Parliament Retiring Allowances Act and to provide for the continuation of a certain provision, be not now read a second time but that the order be discharged, the bill withdrawn and the subject matter thereof referred to the Standing Committee on Procedure and House Affairs.