Thursday, January 28, 2010

Obscene taxpayer and pension abuse in Ottawa

The CBC reported on an issue in Ottawa where the city auditor gave himself a very juicy pension deal courtesy of the taxpayers of Ottawa.

The auditor was leaving employment of the federal government. Unfortunately for taxpayers he had not yet qualified for his gold-plated pension with the feds. He appeared to be a few years and $100,000 short.

Some of the facts are:
  • He had a verbal agreement with Kirkpatrick (city manager) that he could transfer his federal pension to Ontario’s municipal employees’ group pension plan.  
  • He had the opportunity to buy back federal pension time. For an expenditure of $20,256, he was able to boost his federal transfer amount by $175,536
  • Ask the corporate-services committee if it would cover the money he had paid out to enhance his pension. Because such a payment would be a taxable benefit, the city was asked to boost the amount to just under $104,000 to cover the taxes Lalonde would have to pay.
  • Lalonde worked for the federal government and then the City of Gatineau before getting the Ottawa auditor's position in September 2004 
  • The auditor now has full pension credits from three different employers and one taxpayer
        Auditor got $104,000 boost to city pension 
        Pension defence tarnishes auditor

The truly obscene thing about this deal is not the $ 104,000 "bonus" he took from City Hall or the $208,000 that Ottawa pays him every year; it is the fact that he transfers pension credits from one employer to the next, and keeps his full pension.

He appears to be fully qualified for his City of Ottawa pension. At his current salary of $208,000 he will receive a 70% of salary pension for life. This is worth $ 145,000 per year, paid for life and indexed to go up every year. All courtesy of the Ottawa taxpayers.

The fair-value of this pension is close to $ 2.3 Million.

This is the same deal that earlier in the year the President of the University of Calgary received.
University Faculty calls president's pension 'obscene'

Part of the tragedy of this story is that the position of auditor is one that most government organizations should better manage and implement. However, if the auditor himself has no credibility the position loses all of its potency.

Here is an example of the types of issues the auditor can address: 
Sick leave, transit strike cost Ottawa millions 
City auditor general's report

Here is what happens when he has no credibility:
Auditor has no authority to question taxpayer funded party

This is outrageous and Ottawa taxpayers should stand-up against this type of abuse. 

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