FRANKLY SPEAKING: Lucrative pensions of MPs
A friend told me that Gline Clarke, who served as a minister in the Owen Arthur Administration, has made a call for increased pensions for parliamentarians when the current economic fortunes turn around.
Even though my friend is usually reliable, I had difficulty believing him because I found it hard to understand why anyone, who is still in possession of all their mental faculties, could make such a call, in the Barbados context.
I decided not to repeat that bit of news before I read the report for myself. My caution turned to complete amazement when I went about searching and found a story headlined Give Us More in the June 3 edition of Barbados Today which confirmed what my friend had said.
Mr Clarke was quoted as saying: “After spending so many years in here [Parliament], there should be something where parliamentarians can have a decent pension to live on comfortably. We don’t want to be rich. What we get is meagre . . . in terms of living from day to day, it’s really meagre.”
He also said that some MPs are left in degrading positions, unable to survive on their meagre pensions and forced to rely on family for financial support.
But before we start feeling sorry for retired parliamentarians, it would be useful to contrast what they receive against what others, who also give public service, receive. Mind you, as MPs they have been able to legislate some of the most generous pension terms and conditions for themselves. Except for the Prime Minister, all other MPs are pensionable under the Retiring Allowances (Legislative Service) Act.
Originally, both MPs and public servants were able to access their pensions from 55 years of age, but over time Parliament has lowered the qualifying age for MPs to 50 years, and increased the pension age for public officers to 67 years. They are therefore entitled to receive their pensions 17 years ahead of other public servants. That is bad enough, but it gets worse.
Former, and in some cases, sitting MPs, qualify for pensions of half of their highest salary, after serving eight years. On the other hand, public officers qualify for one-fifth of the three-year average of their salary after serving ten years. While former employees of statutory boards, who are pensionable under the Statutory Boards (Pensions) Act, qualify for one-sixth of their salary after serving ten years. That is bad enough but it gets worse.
MPs qualify for a full pension of two-thirds of their highest salary after serving 12 years; public officers are entitled to receive a similar pension after serving thirty-three and one-third years; and employees of statutory boards qualify for the same entitlement after 40 years.
Tomorrow, if a minister demits office after eight years, he would be entitled to receive a “meagre” pension of $6 349.25 per month, and after 12 years’ service, the “meagre” pension would be $8 465.67 per month. In order to appreciate how meagre that pension happens to be, a deputy principal of a secondary school and a senior administrative officer in a ministry both receive a salary of $7 348.54 per month. That is bad enough but it gets worse.
In 1975, legislation was passed in Parliament to provide that persons who join the Public Service, after September 1, 1975 would have their public service pensions reduced by the amount of their National Insurance pension.
In effect, it means that public servants would qualify for the higher of the two pensions. Interestingly, the reduction did not apply to MPs so they would continue to receive both pensions. At their level, MPs should qualify for the maximum NIS pension of $2 419.21 per month, at today’s values, which would give them a total of $10 884.88 per month. A deputy permanent secretary receives a monthly salary of $10 112.48.
In order not to mislead, I must point out that an MP who served 12 or more years, and who opts for a gratuity and reduced pension, would receive a gratuity of 25 months’ pay and a reduced pension of half his highest ever salary.
Also, when a former parliamentarian finally goes to meet his maker, he can do so secure in the knowledge that his widow and children would not end up in the poorhouse. Sections 10 and 11 of the Retiring Allowances (Legislative Service) Act make generous provisions for the widow, while she remains unmarried, and for the children who are under the age of 18 years.
On the other hand, while retaining theirs, Parliament abolished the pensions that were payable to the survivors, in respect of public officers who were appointed on or after April 1, 1978, in accordance with section 3A of the Widows and Children Pensions Act.
The foregoing should be enough to debunk the myth that former ministers are not well taken care of in terms of pension entitlements. But could the former minister have been speaking of former prime ministers? I think not. Their pensions arrangements are the most generous that I have ever seen.
Both Gline Clarke and I agree that there should be some reform in the pensions paid to former parliamentarians, but that is the extent of our agreement. Unlike him, I believe that pension entitlements for MPs are overly generous. Rather than give them more, I propose that some equity should be brought to the pension system by bringing the pensions paid to MPs in line with those paid to former public officers.
Mr Clarke’s revelation that some former MPs cannot live comfortably on their already lucrative pensions clearly demonstrates why they should not have been allowed to manage the country’s finances.
• Caswell Franklyn is a trade unionist and social commentator.