Her Excellency the Right Honourable Adrienne Clarkson, C.C.,
C.M.M., C.D.
Governor General of Canada
Excellency:
I have the honour to submit to Your Excellency the Report
on the Administration of the Members of Parliament Retiring
Allowances Act for the Fiscal Year Ended
March 31, 2002.
Respectfully submitted,
The paper version was signed by
Lucienne Robillard, President of the Treasury Board
The Members of Parliament Retiring Allowances Act (the
Act or MPRAA) governs pension arrangements for members of
Parliament-members of the House of Commons and senators.
Under the Act, the pension plan also provides a survivor
allowance for eligible spouses and children. This report begins
with a summary of the plan's main provisions and then
presents information, for the fiscal year 2001-02, on the
transactions recorded in the pension plan accounts, on membership
and benefits paid. Historical data are also included.
In this report, "members" refers to active and retired
participants in the plan. Where necessary, members of the House
of Commons and senators are referred to separately.
Recent Changes
As a result of Bill C-37, effective September 21, 2000, all
members of the House of Commons are provided with coverage under
the Members of Parliament Retiring Allowance Act.
As a result of Bill C-28, the accrual and contribution rates
were reduced effective January 1, 2001, for Members of the House
of Commons. Also effective January 1, 2001, the average annual
sessional indemnity for purposes of benefit calculation is based
on the best five consecutive years of highest paid earnings,
instead of the best six years. In addition, the Bill established
a disability allowance under the Parliament of Canada Act
for members over 65 years of age.
Funding
Accounts
Two accounts are operated under the plan: the Retiring
Allowances (RA) Account and the Retirement Compensation
Arrangements (RCA) Account.
The RA Account records the transactions related to the
benefits payable under the plan when these benefits accord with
income tax rules for registered pension plans. The RCA Account
records the transactions related to the benefits payable under
the plan when the benefits exceed the limits imposed by those tax
rules.
Members' contributions
Effective January 1, 2001, the contribution rate for members
of the House of Commons was reduced from 9 per cent to 7 per cent
of their sessional indemnities, while the contribution rate for
senators remains unchanged at 7 per cent.
Some members receive additional allowances and salaries as
speakers, ministers, leaders of the opposition, parliamentary
secretaries and so forth. These members must contribute to the
plan, based on these additional allowances and salaries, unless
they elect not to make such contributions or to contribute at a
lower rate.
The prime minister must contribute 7 per cent of the salary
paid to him or her as prime minister in addition to the
contributions required from that individual for their role as a
member of the House of Commons. Any member can decide to
contribute for prior service in Parliament, in which case the
member must pay interest on past service contributions.
Government contributions
On a monthly basis, the government is required to contribute
an amount to each account that, after taking into account
members' contributions, will fund the costs of all future
benefits that members have earned during that month. The
government contribution rate for each account varies from year to
year and can be expressed as a multiple of members'
contributions. The ratios of government contributions to
members' contributions for the calendar years 2001 and 2002
are as follows:
MULTIPLE OF MEMBERS'
CONTRIBUTIONS
|
|
2001
|
2002
|
|
House of Commons
|
|
|
RA Account
|
3.06
|
3.74
|
RCA Account
|
6.46 |
6.95
|
Senate |
|
|
RA Account
|
1.85 |
2.44
|
Interest
Every quarter, the government credits interest on the balance
of each account at a rate set by regulations. For the fiscal year
ended March 31, 2002, the interest rate was 2.5 per cent
per quarter.
Future unfunded liabilities
When the government identifies an unfunded liability after it
tables a valuation report in Parliament, the government must
cover that liability.
Tables 1 to 4 in this report present current and historical
data on the RA and RCA accounts.
Allowances and Other Benefits
Annual allowance
Members
Upon ceasing to be a member of Parliament, members are
entitled to an annual allowance after they have contributed to
the plan for at least six years. For service up to and including
July 12, 1995, former members are entitled to an immediate annual
allowance. For service after that date, former members are not
entitled to an annual allowance until they are 55.
The benefit accrual rate for members of the House of Commons
is 5 per cent per year of service up to and including July 12,
1995; 4 per cent per year of service after that date until
December 31, 2000; and 3 per cent per year of service effective
January 1, 2001, to a maximum of 75 per cent of the average
sessional indemnity. For senators, the accrual rate is 3 per cent
per year of service to a maximum of 75 per cent of the average
sessional indemnity. Effective January 1, 2001, the annual
allowance is based on the member's average pay for the best
five years of pay. Prior to that date, the average pay was based
on the best six years of pay.
The annual allowance of a retired member is suspended if that
person becomes a member again, either as a member of the House of
Commons or as a senator. The annual allowance of a retired member
of the House of Commons is also suspended if that person starts
working for the federal government.
Prime minister
During an individual's tenure as prime minister, the
incumbent must contribute for at least four years if this service
is to be eligible for an allowance. The allowance will be paid
once the prime minister is no longer a member of Parliament or is
65 years old, whichever comes later. The allowance is equal to
two thirds of the annual salary payable to a prime minister at
the time the payment of the allowance begins.
Withdrawal allowance
Some members may get a withdrawal allowance. This is a return
of a member's contributions along with interest on those
contributions at a rate set by regulations. Members get
withdrawal allowances if they do not complete six years of
contributory service, if they are expelled from the House of
Commons or if they leave the Senate by reason of
disqualification.
Survivor allowance
Members
Eligible survivors and children of members may receive an
allowance.
For survivors, this allowance is equal to three fifths of the
basic annual allowance that the member would have been entitled
to receive, or that the retired member was receiving, immediately
before his or her death.
If a child is under the age of 18 or is a full-time student
between 18 and 25 years of age, that child is entitled to a
survivor allowance. This allowance is equal to one tenth of the
member's basic annual allowance or two tenths if no
survivor allowance is being paid.
Prime minister
An eligible survivor receives an allowance equal to one half
of the allowance payable to a former prime minister for service
as prime minister.
Indexing
Allowances to retired members and survivors are adjusted at
the beginning of each calendar year. This adjustment corresponds
to the percentage increase in the average of the Consumer Price
Index (CPI) for the 12 months ended on the preceding
September 30, over the CPI average for the 12 months ended a year
earlier.
Indexing payments do not begin until the former member is 60
years old. But once indexing begins, payments reflect the
cumulative increase in the CPI since the member left
Parliament.
Survivor allowances are indexed immediately based on the date
a member left Parliament.
Minimum benefit
When a member or retired member dies and there are no
survivors entitled to an allowance, then the member's
estate receives the amount by which the member's
contributions exceed any allowances already paid.
Contributors
At March 31, 2002, there were 394 members contributing under
the plan, and there were five vacant seats in the House of
Commons. Tables 5 and 6 in this report present information on the
number and distribution of allowances.
TABLE 1
|
Members of Parliament Retiring Allowances Account (in
dollars)
|
|
Fiscal Year
2001-02
|
Fiscal Year
2000-01
|
From Inception to
March 31, 2002
|
|
Receipts
|
|
|
|
Members' contributions, current
|
1,297,778
|
986,482
|
38,011,611
|
Government contributions, current
|
3,847,838
|
2,882,101 |
51,740,230
|
Members' contributions, arrears
on principal, interest and
mortality insurance
|
69,024
|
595,636 |
5,975,946
|
Government contributions on
amounts payable (re-elections)
|
-
|
-
|
3,226,108
|
Interest
|
33,226,180
|
31,014,334
|
294,111,402
|
Transfer from the Supplementary
Retirement Benefits Account
|
- |
-
|
9,941,788
|
Actuarial liability adjustment |
-
|
- |
158,000,000 |
|
|
Total Receipts
|
38,440,820 |
35,478,553
|
561,007,085
|
|
|
Disbursements
|
|
|
|
Annual allowances
|
15,993,470
|
15,514,009
|
205,429,071
|
Withdrawal allowances including interest
|
5,519
|
159,129
|
7,637,332
|
Pension division payments
|
149,795
|
246,370
|
2,646,003
|
Transfers to Public Service
Superannuation Account
|
-
|
-
|
294,216
|
|
|
Total Disbursements
|
16,147,784
|
15,919,508
|
216,005,622
|
|
|
Excess of Receipts over Disbursements
|
22,293,036
|
19,559,043
|
345,001,463
|
|
TABLE 2
|
Retirement Compensation Arrangements Account (in
dollars)
|
|
|
Fiscal Year
2001-02
|
Fiscal Year
2000-01
|
From Inception to
March 31, 2002
|
|
Receipts
|
|
|
|
Members' contributions, current
|
2,448,630
|
1,812,679
|
15,441,459
|
Government contributions, current
|
15,269,084
|
7,831,603
|
86,932,024
|
Interest
|
6,396,263
|
5,031,774
|
32,649,653
|
|
|
Total Receipts
|
24,113,977
|
14,676,056
|
135,023,136
|
|
|
Disbursements
|
|
|
|
Annual allowances
|
1,368,096
|
1,113,039
|
8,154,793
|
Withdrawal allowances
|
46,142
|
207,462
|
2,269,895
|
Pension division payments
|
402,487
|
-
|
918,092
|
Refundable tax1
|
10,049,942
|
6,460,747
|
59,039,552
|
|
|
Total Disbursements
|
11,866,667
|
7,781,248
|
70,382,332
|
|
|
Excess of Receipts over Disbursements
|
12,247,310
|
6,894,808
|
64,640,804
|
|
1. A refundable tax equal to 50 per cent of contributions
and interest credited to the RCA Account, less 50 per cent of
benefits paid out of the account, must be remitted each year to
the Canada Customs and Revenue Agency.
TABLE 3
|
Members of Parliament Retiring Allowances Account
Comparative Data - November 20, 1952, to March 31, 2002 (in
dollars)
|
|
Fiscal
Year
|
Members'
Contributions1
|
Government Contributions
|
Interest
|
Total
Receipts
|
Annual
Allowances
|
|
1952-1986
|
19,980,052
|
20,098,979
|
14,555,926
|
54,635,425
|
27,331,601
|
1986-87
|
2,104,235
|
1,906,447
|
2,681,302
|
6,691,984
|
4,304,166
|
1987-88
|
2,039,384
|
1,883,721
|
2,729,295
|
6,652,400
|
4,392,043
|
1988-89
|
2,175,303
|
1,897,766
|
2,950,677
|
7,023,746
|
5,086,914
|
1989-90
|
2,267,074
|
2,082,958
|
2,960,449
|
7,310,481
|
6,197,822
|
1990-91
|
2,305,080
|
2,175,581
|
3,059,384
|
7,540,045
|
6,368,934
|
1991-92
|
2,060,258
|
2,220,659
|
3,440,449
|
175,663,1542
|
7,187,271
|
1992-93
|
1,042,520
|
2,131,335
|
20,493,768
|
23,667,623
|
9,813,446
|
1993-94
|
1,048,643
|
2,064,761
|
21,882,703
|
24,996,107
|
12,084,079
|
1994-95
|
1,070,539
|
1,884,100
|
22,861,864
|
25,816,503
|
15,432,287
|
1995-96
|
990,575
|
1,685,476
|
23,933,398
|
26,609,379
|
14,947,496
|
1996-97
|
876,577
|
1,561,870
|
25,029,451
|
27,467,898
|
15,000,643
|
1997-98
|
941,060
|
1,707,658
|
26,262,499
|
28,911,217
|
15,251,902
|
1998-99
|
1,081,944
|
2,261,588
|
27,620,578
|
30,964,110
|
15,211,454
|
1999-2000
|
1,054,926
|
2,673,500
|
29,409,145
|
33,137,571
|
15,311,534
|
2000-01
|
1,582,118
|
2,882,101
|
31,014,334
|
35,478,553
|
15,514,009
|
2001-02
|
1,366,802
|
3,847,838
|
33,226,180
|
38,440,820
|
15,993,470
|
Totals
|
43,987,558
|
54,966,338
|
294,111,402
|
561,007,086
|
205,429,071
|
Fiscal
Year
|
Withdrawal
Allowances
|
Transfers to PSS Account
|
Total Disbursements
|
Account
Balance
|
|
1952-1986
|
2,855,260
|
269,623
|
30,456,484
|
24,179,007
|
1986-87
|
-
|
-
|
4,304,166
|
26,566,825
|
1987-88
|
47,801
|
-
|
4,439,844
|
28,779,384
|
1988-89
|
1,461,995
|
-
|
6,548,909
|
29,254,221
|
1989-90
|
124,942
|
24,593
|
6,347,357
|
30,217,345
|
1990-91
|
27,364
|
-
|
6,396,298
|
31,361,092
|
1991-92
|
7,339
|
-
|
7,194,610
|
199,829,636
|
1992-93
|
17,221
|
-
|
9,830,667
|
213,666,592
|
1993-94
|
1,852,076
|
-
|
13,936,155
|
224,726,544
|
1994-95
|
58,833
|
-
|
15,491,120
|
235,051,927
|
1995-96
|
936,723
|
-
|
15,884,219
|
245,777,087
|
1996-97
|
138,5163
|
-
|
15,139,159
|
258,105,826
|
1997-98
|
840,5213
|
-
|
16,092,426
|
270,924,617
|
1998-99
|
673,9143
|
-
|
15,885,368
|
286,003,360
|
1999-2000
|
680,0153
|
-
|
15,991,549
|
303,149,382
|
2000-01
|
405,4993
|
-
|
15,919,508
|
322,708,427
|
2001-02
|
155,3143
|
-
|
16,147,784
|
345,001,463
|
Totals
|
10,283,336
|
294,216
|
216,005,623
|
|
|
1. Includes contributions for current and prior service and
interest paid by members.
2. Includes a transfer of $9,941,788 from the Supplementary
Retirement Benefits Account and an actuarial adjustment credit of
$158,000,000.
3. Includes pension division payments.
TABLE 4
|
Retirement Compensation Arrangements Account Comparative
Data - January 1, 1992, to March 31, 2002 (in
dollars)
|
|
Period/
Fiscal Year
|
Members'
Contributions
|
Government Contributions
|
Interest
|
Total
Receipts
|
Annual
Allowances
|
|
Jan. to Mar. 1992
|
396,201
|
2,798,902
|
-
|
3,195,103
|
10,050
|
1992-93
|
1,548,519
|
11,038,414
|
806,119
|
13,393,052
|
61,148
|
1993-94
|
1,553,821
|
10,394,866
|
1,487,793
|
13,436,480
|
391,546
|
1994-95
|
1,610,329
|
9,058,349
|
2,025,049
|
12,693,727
|
727,802
|
1995-96
|
1,246,927
|
5,971,846
|
2,563,705
|
9,782,478
|
762,478
|
1996-97
|
1,074,385
|
4,944,660
|
2,853,534
|
8,872,579
|
772,012
|
1997-98
|
1,147,880
|
5,410,244
|
3,257,976
|
9,816,100
|
954,739
|
1998-99
|
1,353,367
|
6,816,386
|
3,769,294
|
11,939,047
|
976,109
|
1999-2000
|
1,248,721
|
7,397,670
|
4,458,146
|
13,104,537
|
1,017,774
|
2000-01
|
1,812,679
|
7,831,603
|
5,031,774
|
14,676,056
|
1,113,039
|
2001-02
|
2,448,630
|
15,269,084
|
6,396,263
|
24,113,977
|
1,368,096
|
Totals
|
15,441,459
|
86,932,024
|
32,649,653
|
135,023,136
|
8,154,793
|
Period/
Fiscal Year
|
Withdrawal Allowances
|
Refundable
Tax
|
Total Disbursements
|
Account
Balance
|
|
Jan. to Mar. 1992
|
-
|
-
|
10,050
|
3,185,053
|
1992-93
|
3,901
|
6,516,391
|
6,581,440
|
9,996,665
|
1993-94
|
571,762
|
6,637,345
|
7,600,653
|
15,832,492
|
1994-95
|
27,775
|
5,807,226
|
6,562,783
|
21,963,436
|
1995-96
|
574,6321
|
4,808,645
|
6,145,755
|
25,600,159
|
1996-97
|
57,1671
|
3,884,619
|
4,713,798
|
29,758,940
|
1997-98
|
718,3851
|
3,982,375
|
5,655,499
|
33,919,541
|
1998-99
|
113,9331
|
5,101,490
|
6,191,532
|
39,667,056
|
1999-2000
|
464,3611
|
5,790,772
|
7,272,907
|
45,498,686
|
2000-01
|
207,462
|
6,460,747
|
7,781,248
|
52,393,494
|
2001-02
|
448,6291
|
10,049,942
|
11,866,667
|
64,640,804
|
Totals
|
3,188,007
|
59,039,552
|
70,382,332
|
|
|
1. Includes pension division payments.
TABLE 5
|
New and Past Allowances for the Fiscal Year
2001-02
|
1. a) the following 19 new allowances became payable:
3 to former senators
6 to the survivors of former senators
3 to former members of the House of Commons who were
reinstated
7 to survivors of former members of the House of Commons
|
b) withdrawal allowances (i.e., return of members'
contributions with interest) were paid in respect of one senator
and one member of the House of Commons who retired.
|
2. The following 19 allowances ceased to be payable to persons
who died:
9 former members of the House of Commons
3 survivors of former members of the House of Commons
1 senator
5 former senators
1 survivor of a former senator
|
Since the Act came into force on November 20, 1952, a total of
1,100 annual allowances and 833 withdrawal allowances have been
authorized.
|
TABLE 6
|
Distribution of Annual Allowances in Pay
|
The distribution of annual allowances in pay (including
applicable indexation) at March 31, 2002, was as follows:
|
Amount of
Allowance
|
Former
Members
|
Survivors
|
Dependant
Children
|
Total
|
|
Over $70,000
|
5
|
-
|
-
|
5
|
65,000 - 69,999
|
10
|
-
|
-
|
10
|
60,000 - 64,999
|
5
|
-
|
-
|
5
|
55,000 - 59,999
|
8
|
-
|
-
|
8
|
50,000 - 54,999
|
18
|
-
|
-
|
18
|
45,000 - 49,999
|
43
|
-
|
-
|
43
|
40,000 - 44,999
|
28
|
1
|
-
|
29
|
35,000 - 39,999
|
23
|
5
|
-
|
28
|
30,000 - 34,999
|
38
|
10
|
-
|
48
|
25,000 - 29,999
|
64
|
16
|
-
|
80
|
20,000 - 24,999
|
30
|
6
|
-
|
36
|
15,000 - 19,999
|
30
|
16
|
-
|
46
|
10,000 - 14,999
|
30
|
13
|
-
|
43
|
5,000 - 9,999
|
34
|
22
|
-
|
56
|
Up to 4,999
|
36
|
44
|
3
|
83
|
Totals
|
402
|
133
|
3
|
538
|
Notes
1. In addition to the above allowances, a former member was
in receipt of an indexed annual allowance for service as
prime minister.
2. The average annual allowance, including indexation, was
$36,637 for former members of the House of Commons and $42,693
for former senators.
|