FSNA Activities in Defending Pension Benefits and Rights
This message is specifically for FSNA members who are Canadian Forces retirees. Another retirees’ association has been making statements that contain incorrect or misleading information.
¼br> Those of our members who also belong to that association or who are familiar with the information being circulated know that FSNA is a very open, frank, and democratic organization. They understand that FSNA always provides accurate facts and never hides information from its members. The following is in response to incorrect and/or misleading statements. It is a brief listing of positions and action taken by FSNA in response to proposed or enacted pension legislation.
Bill C-33 of 1986
This Bill was not passed by Parliament. Bill C-33 would have created a Pension Management Board for the Public Service that would have determined, each year, the increases applicable on pensions earned following the passage of the Bill.
Increases were no longer to be automatically based on increases in the Consumer Price Index, but could have been somewhat less, depending on the performance of the fund.
Full and automatic indexing of pensions would have been maintained for those already retired and for that portion of the pension of a future retiree that accrued before the date of passage of the Bill.
The Public Service Alliance of Canada (PSAC) and the Professional Institute of the Public Service of Canada (PIPSC) tentatively agreed to accept the pension increase proposals in the Bill. FSNA did not – but has been accused of doing so.
The facts are:
- FSNA was not part of the agreement between Treasury Board Secretariat, PSAC, and PIPSC.
- At no time did FSNA ever agree to less than full and automatic indexing of pensions either for existing or future pensions. FSNA wrote many letters and made many representations to Ministers, objecting to the potential reduction in indexing.
- The FSNA brief submitted to the House of Commons Committee considering Bill C-33, in March of 1987, contained the following statements in relation to the Pension Management Board:
“There must be a statutory obligation on the Pension Management Board (PMB) to provide for the full indexing of all future pensions…
…The Pension Management Board must be provided with the authority to meet such a statutory requirement.” - The FSNA position on this issue has always been clear and consistent: We have always insisted on nothing less than full and automatic indexing for all pensions.
Bill C-78 of 1999
This Bill, the Public Sector Pension Investment Board Act, was passed by Parliament in 1999. Bill C-78 introduced amendments to the superannuation acts, some of which allow the Government to remove certain portions of the surplus in the superannuation accounts over a period of time up to 15 years.
Such removals to any superannuation account can only take place after an actuarial report on the account has been laid before Parliament.
To date, February 2001, no such reports have been laid before Parliament and no amounts have been removed from any of the accounts.
During the debate on Bill C-78, the President of the Treasury Board Mr. Marcel Massé stated that the largest pensioner association agreed with the government’s position that the surplus belonged to the government.
During his presentation to a Parliamentary Committee examining Bill C-78, Mr. Massé held up a printout of a page posted March 10, 1999 on FSNA’s web site which he claimed showed support for his position.
It states in part:
“FSNA’s position in relation to the pension surplus has always been clear and consistent: Any surplus must be shared equitably by the employer (the taxpayers), employees, and pensioners. This position has been included in a number of letters to Cabinet Ministers and in formal presentations to Ministers. FSNA believes that forcing a decision at the Supreme Court level on “ownership” of the surplus would inevitably lead the discussion away from a question of fairness and equity. FSNA has consulted independent professional and legal experts in the pension field and has been advised that, on the basis of current legal jurisprudence, the employer can decide how to dispose of the surplus. However, it should also be noted that, under the current legislation, the employer would be required to make up any shortfalls were the plan in a deficit position. Even in a deficit situation, the Government would not be able to reduce any of the benefits to pensioners.”
This was the statement Mr. Massé interpreted to mean that we agreed with his position that, legally, the government owned the surplus.
The statement does not say that FSNA agrees that the government owns the surplus.¼br> It says that FSNA was advised by legal experts that in their opinion the government could dispose of the surplus as it wishes. It was based on their interpretation of the Superannuation Acts as they read at that time.
FSNA believes that our members have the right to know why the Association proceeds in the way that it does. The Association is forthright and honest with the membership at all times, always giving its members full and correct information. We have nothing to hide.
This Association has been accused of trading the surplus for a dental plan.
The fact is that FSNA could not trade its members’ claim to the surplus for a dental plan because FSNA has never agreed that the government has the exclusive right to the surplus. In fact, the dental plan was the result more than 10 years of lobbying effort by FSNA. It was not part of any other agreement! It is an achievement of which we are most proud!
