I would like to respond to misleading information Mr. Chong has presented in regards to his MP’s pension. Mr. Chong states he pays $21,000 in cash and foregone RRSP refunds to his pension. The facts are: he pays $10,900 into his pension which is tax deductible. A further non taxed contribution, payed for by taxpayers, increases his benefit to over the $22,450, the maximum tax free contribution allowable for pensions. Mr. Chong is not foregoing any tax refunds. In fact, for a person to be eligible for the same pension an MP can receive after 6 yrs service, they would have to contribute $129,000 per yr. of their pretax income. As Mr. Chong’s pension is not invested but is guaranteed a return of 10.4% through taxation, he is not exposed to market conditions where taxpayers have seen a devaluation of up to 18% of their pension investment. And yet he bemoans his lack of tax refund on his no risk, non taxed, maximum allowable contribution. Mr. Chong can draw a pension after 11 yrs of service of $51,241 at age 55. At age 60 his pension will be adjusted upwards in line with increases to the consumer price index for the previous 15 yrs. With average life expectancy he will draw 2.8 million dollars on $121,000 in personal, tax free, contributions. Remember this is if he retires at 45 yrs, having worked 11: his pension goes up exponentially for every year Chong sits in Ottawa. If not, he has at least 20 yrs left to work and invest in addition to drawing the unindexed portion of his pension for 5yrs and the fully indexed for a further 5. Mr. Chong points out that when he draws his monthly pension it will be taxable; and that his pension is not an asset transferable to his children. Well, welcome to our world. Those, Mr. Chong, are facts.
Raymond Trafford