Another unfair situation for taxpayers

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By Colin Craig

They say that life isn’t fair.

Sometimes you just have to grit your teeth and bear it when someone steals a parking spot you had been waiting for. Or perhaps when a computer glitch causes you to lose out on that Chia Pet you were bidding for on eBay.

And then there are things that are really unfair, but you can change.

Right now taxpayers have to pay a fortune for the pension plan provincial judges in Saskatchewan receive. It is beyond anything most would consider reasonable. But as we’ve seen with plenty of other examples, if enough taxpayers speak out and put pressure on politicians to do something, they’ll take action.

Consider how the judges’ pension plan works.

Right now provincial judges put in just five per cent of their salary into the pension plan each year. So a judge making $238,943 per year (upper limit as of 2011) would put in $11,947 per year.

Based on the payout formula, if that judge retired after serving for 25 years they would receive at least $111,507 every year until they die.

Think about that for a second. You put in $11,947 per year (it’s actually less during a judge’s earlier working years) while you’re working and then get at least $111,507 every year after you retire?

It doesn’t take a rocket scientist to realize something is up. After all, making payments of $11,947 per year into a fund only generates so much interest. Where is all the extra money coming from?

You guessed it, your pocket.

Consider that there are 55 retired judges drawing payments from the pension plan right now and 51 that are working and paying into it. The plan has about $24 million saved up.

The government doesn’t put money into the fund each year, it just cuts a cheque for whatever the fund needs in order to pay its members; that’s known as a “pay as you go” plan. However, even if the government had put $1 into the fund every time a judge put in $1 the pension plan, the fund would “only” have about $48 million.

We say “only” because the plan’s annual report estimates it owes $159 million to former and current employees. In fact, the forecast for how much the fund is short is up a whopping 52 per cent since 2010 ($89 million.) In other words, it’s spiraling out of control.

Again, the difference between the $24 million the fund has and the $159 million it has to pay out will all fall on the taxpayers’ shoulders.

Given the fund’s promises to judges are way too generous, the question is  - what is the government doing about the situation? Nothing apparently. Pension reform doesn’t seem to be the government’s agenda.

What the government needs to do is take a page out of former NDP Premier Allan Blakeney’s book and start putting new judges hired by the government in a far less costly pension plans known as a “defined contribution” plan. Blakeney started doing this with most provincial government employees in the 1970s in order to protect taxpayers from big bills in the future.

While Blakeney’s government was successful at putting most new government employees in less costly pension plans, a few divisions of government employees never made the switch. Judges and most health care employees are a couple examples.

The Canadian Taxpayers Federation, a donation-based taxpayers’ watchdog organization, has called on the Wall government to finish what Premier Blakeney started and stop putting new employees in expensive employee plans like the ones judges enjoy.

Now it’s time for you to be the ‘judge’ - keep putting new government hires in expensive pension plans that are risky for the taxpayer or something more sustainable and fair for the taxpayer?

When you’ve reached a verdict, be sure to let the government know.

Colin Craig is the Prairie Director for the Canadian Taxpayers Federation

Organizations: Canadian Taxpayers Federation

Geographic location: Saskatchewan

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