Pension Grab: Another Government Plunder
Archives
March 5, 2007
Surplus has come from workers
Regardless of what accounting mumbo-jumbo government lawyers use to defend their theft of the pension surplus, to pension-plan members it is plain and simple: That surplus, or at least a good portion of it, came from their paycheques. Read the details.
February 28, 2007
Pension surplus litigation
The trial resumed on Monday, February 26, with opening arguments from the lawyers of the unions, employee associations and retiree groups. Six weeks has been reserved for the presentation of evidence and witness testimonies. We will be posting updates of the trial on this web site after each highlight in the proceedings.
February 13, 2007
Plaintiffs send letter to PM urging him to intervene
The 18 unions, employee associations and retiree groups in the pension lawsuit has sent a letter to remind the Harper government of many of its party members' opposition to the pension-surplus grab. Read the press release. Read the letter.
September 1st, 2006
Pension surplus litigation:
No out-of-court settlement, trial to resume in February 2007
Rumours have been circulating that there have been discussions for an out-of-court settlement in the pension surplus litigation against the federal government. These rumours are false. As far as the PSAC is concerned, the legal proceedings will resume on February 27, 2007. The PSAC is committed to continuing the litigation in Court and fighting to restore the $30-billion pension surplus back into the pension accounts.
The Court has reserved six weeks, beginning in February, for opening arguments and presentation of evidence and expert testimony. This stage of the trial will be followed by a three-week recess. After the recess, the Court has reserved a further three weeks for closing arguments. Once the trial has concluded, the Court will work on its judgment.
We will post updates on the PSAC web site as information becomes available.
April 25, 2006
Pension surplus trial scheduled for February 2007
The trial has been scheduled to resume on February 27, 2007. The Court has reserved six weeks for opening arguments and presentation of evidence and expert testimony. This stage of the trial will be followed by a three-week recess. After the recess, the Court has reserved a further three weeks for closing arguments. Once the trial has concluded, the Court will work on its judgement.
January 4, 2006
Judge says yes to written documents in pension surplus case
The judge hearing the case against the federal government’s pension surplus grab has ruled that 128 government documents are admissable as evidence at the trial. Lawyers for the government had tried to block this written evidence as they wanted the unions to have to call the authors of all the documents during the trial, which would have created serious delays in the already six-year old case. The trial is expected to continue in the spring.
November 22, 2005
Government disputes admissibility of own documents
Lawyers for the government are trying to block written evidence that would seriously weaken their case and to cause serious delays in our lawsuit that's already into its sixth year. Read the update
November 8, 2005
Update on the Public Service Pension Surplus litigation
Once again, the date for the Public Service Pension Surplus Trial has been changed. It has reverted back to Tuesday, November 15. In the meantime, here is a flyer that provides the background and the impact to our members. You can also download the Fresh Statement of Claim submitted for the case here.
September 1 , 2005
Public Service Superannuation Plan Surplus Litigation
Final pre-trial preparations underway. Details
January 26, 2005
PSAC pension surplus lawsuit finally goes to court
The PSAC will finally get its day in court six years after the union filed a lawsuit against the federal government for their arbitrary removal of the surplus in the Public Service Superannuation Plan and two other federal pension plans. Read the latest news.
September 9 2003
Unions' suspicions confirmed on the use of the surpluses - PSAC case works its way through Discovery phase Read the update
October 17 2002
The court case continues
Read the update
November 23 2001
Federal government continues to slow down Pension Surplus court challenge
Readthe update
June 25
TB President responds to letter from PSAC regarding March 2001 Ottawa Citizen article
Read the letter to PSAC President Nycole Turmel.
May 25
Erosion of our pension benefits?
NO WAY!
An update on the federal public service superannuation plan
Summary of PSAC argument in the pension surplus case
Facts of the Case
Prior to the passage of the Public Sector Investment Board Act, the Government of Canada was required to credit the Superannuation Account with an amount equal to the amount contributed by its employees. In addition, the Government was required to credit the Superannuation Account with an amount each month to cover the cost of future benefits accrued in respect of pensionable service during the month. The Government has never undertaken the sole risk of funding the benefits. For example, in 1970, when it was projected there would be insufficient assets to provide benefits, mandatory employee contributions were increased through the enactment of the Supplementary Retirement Benefits Act.
Today, the public service, RCMP and Canadian Forces pension plans have developed a combined surplus in the order of 30 billion dollars. A number of factors have contributed to this surplus. In particular, the contributors have been subject to Parliamentary intervention in respect of the terms and conditions of their employment; most notably for pension projection purposes is the impact of a long period of wage freezes. Pension projection assumes contributors will receive annual raises in pay.
Treasury Board acknowledged that it did not have the legal authority to touch the surplus without amending the legislation. The Public Sector Investment Board Act (PSIBA) gives the Government the authority to take ownership of the surplus for its exclusive use without regard to the percentage of the overall fund represented by contributions by its employees. Effectively, the legislation greatly reduces the Government’s share of the cost by shifting the cost to the contributors.
Pursuant to s.95 of the PSIBA, the Government will no longer be required to make contributions at least equal to the contributions required to be made by employees. It continues to have the authority to raise the mandatory employee contributions in the case of shortfall or to reduce or cease employer contributions if the Public Service Pension Fund finds itself in a surplus.
Finally, the Act denies access to the Court or any other decision maker to address disputes regarding the employees’ interest in the surplus.
In a nutshell, it has never been the employees’ understanding that the pension plan was self-funded. It is an employee benefit with an understanding of the joint financial responsibilities of the contributors and the employer. The employer, through legislation, has decided to unilaterally reduce its historic responsibility and pocket the existing surplus.
Legal Argument
As the PSAC membership has learned too often, Parliament can unilaterally control its employees through legislation. In this case, successive governments’ willingness to legislate rather than negotiate may be of assistance.
The PSAC Claim alleges a violation of s.15 of the Canadian Charter of Rights and Freedoms. It states that public service workers are a uniquely disadvantaged group contemplated by s.15 "because their employer, the Government of Canada, has consistently and repeatedly resorted to using its legislative power to unilaterally amend or revoke the terms and conditions of employment of its employees to their detriment. In this case, the Government has not given similar rights to other employers in the federal jurisdiction to unilaterally appropriate a pension surplus without legal authority. Instead, it attacks only federal government employees and perpetuates the stereotypical view that public service workers enjoy undeserved benefits and are therefore less deserving of their legal rights.
Secondly, the provisions of the Act which deny access to the Courts are offensive of the rule of law in Canada and the legitimate rights and expectations of contributors respecting their interests in the fund and its current surplus created, in part, by their contributions.
Thirdly, the PSAC asserts the Government’s action constitutes a breach of contract in that the pension fund is part of the terms and conditions of employment governing public service workers.
Fourthly, the PSAC states that as manager of the fund, the Government has been impressed with a trust and its actions "are subject to a fiduciary obligation to manage and account for the monies in the Plan in a fashion which is in the best interest of the contributors to the Plan. Clearly the Government has preferred its own interests to the complete exclusion of the interests of the contributors.
Finally, the PSAC states that the surplus has arisen from the commingled amounts from the contributors and the employer credited to the Superannuation Account. In turn, the surplus consists, in part, of the workers’ contributions and interest credit. At least, the employees have a pro rata interest in any surplus based on their share of the total contributions.
On November 8, 1999, the PSAC filed its Statement of Claim in the Ontario Superior Court of Justice. No date of hearing has been set.
November 19, 1999.
Copyright © 1999-Public Service Alliance of Canada.
Created: June 18, 1999.
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Date Modified : 2008/05/20
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