Smith to get $87k a year, air travel
Outgoing MP Nick Smith is entitled to a superannuation allowance of about $87,000 a year along with international travel perks after he leaves Parliament next week.
Smith announced his shock resignation this week, saying he would leave on June 10 after being told a Parliamentary Service investigation into “a verbal altercation in my Wellington office last July that has not concluded” was leaked to media.
He has apologised for the outburst.
After he resigns, Smith, who entered Parliament in October 1990 and is the longest consecutively serving MP, will be entitled to a range of perks for the rest of his life.
Only Speaker Trevor Mallard has been in Parliament longer, entering in
1986, however his service was interrupted between 1990 and 1993.
Having entered Parliament before
1992, and serving uninterrupted, Smith is entitled to what has been dubbed a “gold-plated” superannuation scheme. The rate means he would receive about $87,000 annually for the rest of his life, just over half a backbencher’s base salary of $163,961.
Smith could also choose a lump sum — or part of one — by opting for no allowance or a lower allowance.
The scheme closed to newcomers
in 1992, but those MPs already in it were able to stay in and their entitlements were not affected.
In the past decade 12 MPs have retired on the scheme, including National’s Lockwood Smith, Bill English, Tony Ryall, Murray McCully, John Carter and Maurice Williamson; Labour MPs Lianne Dalziel, George Hawkins, Ross Robertson and Pete Hodgson; Progressives leader Jim Anderton and United Future leader Peter Dunne. Smith is the last entitled to the scheme.
MPs who served from before 1992 put in 11 per cent of a backbench MP’s salary for their first 20 years, and 8 per cent after that. The annual allowance after retirement is calculated by a formula, depending on length of time as an MP. Those in Parliament for
20 years got an allowance worth about two-thirds of an MP’s annual salary on the day they began to receive the annuity. Years served after
20 years saw the rate lower.
The allowance is pegged to the Consumer Price Index, so increases every year. The value of the taxpayer contribution under the scheme has been valued at 23 per cent of an MP’s gross annual salary.
As well, Smith would be entitled to free international travel for himself and his spouse for life. The travel perk only applies to MPs who served three terms before 1999, and is capped at the cheapest Air New Zealand business-class flight to London each year and 12 domestic return flights.
Former MPs and their partners spend about $1 million a year through this entitlement — though the MPs received less pay when working at Parliament because of it.
Meanwhile, post-1992 MPs are also entitled to a superannuation scheme but at a slightly lower rate, putting in up to 8 per cent of a backbencher’s salary. Until 2003 the taxpayer put in $2 for every $1 from the MP.
In October 2003, the taxpayer contribution rose to $2.50 for every $1.
MPs choose a super scheme and are susceptible to investment woes.
Smith did not respond to a request for comment.