Pension Funds Surplus Trial Starts Today
The trial regarding the $30.2-billion surplus taken from the superannuation accounts of the Canadian Forces (CF), the Public Service (PS), and the RCMP started today in the Ontario Superior Court of Justice, in Ottawa.
The initial trial process, focusing on the admissibility of the “Statement of agreement”, is expected to last about five days. An adjournment of two to three months will most likely follow to allow the judge to review the issue of admissibility.
FSNA National President Dennis Jackson is attending the trial’s opening session. He, as well as the Executive Director, Jean-Guy Soulière, and the National Office Senior Research and Communications Officer, Bernard Dussault, will be FSNA’s official spokespersons on this matter.
Origin of court case
The court case challenges the pension surplus related portion of Bill-C-78 that was introduced in the spring of 1999, following failure to reach an agreement on a new pension deal between the bargaining agents, the pensioners’ representative, and the employer. The negotiations ended in December 1998 because the employer refused to discuss the matter of surplus distribution.
Arguments to be laid out during trial
The following arguments will be laid out during the trial:
The Government violated its legal obligation to use the surplus in the best interest of federal public sector workers and retirees.
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 sector workers.
Since the active and retired pension plan members contributed in part to bring about the surplus, they are at least entitled to a part of it based equitably on their share of contributions.
Bill C-78 discriminates against public sector workers under Canada’s Charter of Rights and Freedoms.
FSNA’s position on surplus
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), the employees, and the pensioners.
Bill-C-78 pension surplus implications
Bill C-78 introduced amendments to the superannuation acts that allowed the Minister to withdraw certain portions of the surplus from the superannuation accounts over a period of time up to 15 years. Such withdrawals could only take place for a given plan after an actuarial report on that plan was laid before Parliament. “Surplus withdrawals” have since been made at least once from each of the plans. They amount to $15.6 billions for the CF account, $10.3 billions for the PS account, and $2.4 billions for the RCMP account. This represents a total of $28.3 billions as at 31 March 2004. The latest government financial report (summer 05) shows that a $28.3-billion surplus has been “retired”.
Joint lawsuits
Three lawsuits are challenging the government’s decision to take the accumulated surplus. One was filed by the Public Service Alliance of Canada; one by the Professional Institute of the Public Service of Canada on behalf of the other National Joint Council Bargaining agents and other organizations, including FSNA; and one was filed by the Armed Forces Pensioners’/ Annuitants’ Association of Canada in conjunction with the RCMP Association and the SSEA, now the Canadian Association of Professional employees.
Because the three cases relate to the same surplus matter, the three groups of plaintiffs, the government’s lawyers, and the Court agreed that the three cases would be heard at the same time, under a single trial. Consequently, the law firms representing each of the cases have been working together and holding periodic meetings with the plaintiffs.
