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The Treasury Board has announced the increase in indexing to be applied to Public Service, Canadian Forces, and RCMP pensions in January 2008. The rate for 2008 will be 1.8 per cent. For details on the actual calculation, click here.

FSNA’s National Board of Directors is awaiting the expert independent advice of an appellate court lawyer regarding the appeal of the dismissal verdict rendered in the pension surplus court case last November.

This decision was taken following a meeting with representatives of all the plaintiffs and their legal counsels on January 23, 2008 to further discuss the three notices of appeal that were filed on December 28, 2007 by the Public Service Alliance of Canada; 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 by the Armed Forces Pensioners’/ Annuitants’ Association of Canada in conjunction with SSEA, now the Canadian Association of Professional Employees.

It is expected that it would take at least a year before the Ontario Court of Appeal hears any appeal.

December 5, 2007
Pension surplus dismissal of actions:
FSNA Board votes to file notice of appeal

In consultation with its lawyers, FSNA has thoroughly studied in detail the Ontario Superior Court's decision rendered on this case. At a teleconference on Tuesday, December 4, 2007 the FSNA National Board of Directors voted unanimously in favour of filing a notice of appeal following the judgment dismissing the actions rendered on November 20 by Justice de Lotbinière Panet. FSNA’s decision has been communicated to our partner plaintiffs.

In a verdict rendered on November 20, 2007, Justice de Lotbinière Panet of the Ontario Superior Court of Justice dismissed the actions challenging the federal government's decision to take the $30-billion surplus accumulated in the superannuation accounts of the Canadian Forces, the Public Service, and the RCMP.

The judge concludes his 102-page decision by finding that: "the members of the three superannuation plans under the three Acts, the PSSA, the CFSA, and the RCMPSA, have no equitable interest in the superannuation accounts established under the legislation."

The parties have 30 days to file a Notice of Appeal. The National Board of Directors will review the decision and discuss possible courses of action.

To read the judgment of Justice Panet, click here. (102 pages, PDF, opens in new window/tab)

May 11, 2007
Pension surplus trial concluded:
judge's verdict expected in six months

Final arguments began in the pension surplus case on May 1, 2007. They were originally expected to last from one to two weeks. However they were finished in no more than three days. Now that the court proceedings are over, Justice Panet will look through information from 18 days of trial that have involved 10 witnesses and close to 60 exhibits. For more details, click here.

April 3, 2007
Presentation of Evidence and Expert Testimony Wrapped Up: Counsel Now Preparing Closing Arguments

Day 15 of the pension surplus trial kicked off with the recall of a former auditor with the Office of the Auditor General, Scott Milne, who was asked to clarify several technical points relating to the Public Accounts of Canada. For more details, click here.

March 20, 2007
Pension surplus balloons to $42 billion: expert witness

A former government auditor testified in Court that the surplus in the public service, RCMP and Canadian Forces pension accounts have now increased to $42.7 billion. For more details, click here.

March 9, 2007
Expert witness says public pension plans have assets

An actuarial expert testified that assets were transferred from the Public Service Superannuation Account to newly created pension plans of local airport authorities, NAV Canada and Canada Post, providing solid evidence that there were funds in the public service pension account. For more details, click here.

The trial on the federal pension accounts surplus resumed on February 26 before the Ontario Superior Court of Justice with the opening arguments from the lawyers representing the unions and the retirees. These arguments were based on the statement of claim filed by the plaintiffs.

The trial on the federal pension accounts surplus is to resume on 26 February before the Ontario Superior Court of Justice, in Ottawa. The p resentation of evidence and expert testimony is scheduled to last until 13 April and the final arguments are to be heard from 30 April to 18 May.

In mid-February, the plaintiffs, i.e. FSNA and the F ederal Public Service Bargaining Agent Representatives, remained extremely confident that the facts of this case and existing legal jurisprudence would eventually result in a court decision in favour of employees and pensioners.

In a letter that they wrote to Prime Minister Harper, the plaintiffs strongly encourage his government to intervene in this matter and spare the Canadian public any further expense and acrimony of long and protracted legal proceedings, believing that the interests of all parties would be better served in this manner.

The Court Challenge regards the $30.2-billion surplus taken from the Canadian Forces (CF), the Public Service (PS), and the RCMP pension accounts following the adoption of Bill C-78 in 1999.

January 24, 2007
FSNA reacts to report perpetuating myths about public sector pension plans

The report characterizes public sector pensions, among other things, as generous, often under funded, relying on taxpayers to make up any funding shortfalls, prone to increasing benefits during periods of surplus and not subject to the production of periodic actuarial reports.

The Age Credit increase and the mechanism that would allow splitting pension income for income tax purposes need to receive Royal Assent before being implemented.

For taxation year 2006, the $1,000 increase would bring the Age Credit amount to $5,066, thus representing maximum savings of $152.50 per person 65 years of age and older.

Pension income splitting is not to be made available before 2007. Therefore, pensioners won't see the effects of this mechanism before spring 2008, when they fill out their income tax return for year 2007.

Although step-by-step information is expected to be released in 2008 to help taxpayers file their 2007 tax report, a Senior's Tax Saving Calculator as well as some basic information are already available at the Department of Finance Web site.

October 2006
Pension Income Splitting Principle Unchallenged at National Conference

The principle of legislating pension income splitting for senior Canadian couples went unchallenged at the national conference on pension tax reform "Pension Tension" that was held on October 3, in Ottawa. Click here for more details.

September 2006
FSNA Brief of Pension Splitting

FSNA submitted a brief on pension splitting to the House of Commons Standing Committee on Finance as part of the pre-budget consultations for budget 2007.

March 10, 2006
Trial to reconvene in February 2007

Theearliest date for the trial on the pension surplus to reconvene is February 26, 2007. It is estimated that the trial itself could last six weeks and the�time required for argument could be�two weeks.

Ottawa Citizen articles concerning the Pension Funds Surplus Trial
30 Billion dollar question, click here to read the article.
Judge OKs memos, click here to read the article.

In a decision dated December 23, 2005, Justice De Lotbinière Panet of the Ontario Superior Court of Justice ruled that 128 internal government documents would be admitted into evidence in the court cases regarding the $30.2-billion surplus taken from the Canadian Forces (CF), the Public Service (PS), and the RCMP pension accounts. Click here for more info.

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, declared the plaintiffs in a joint bulletin. To read the entire bulletin, click here.

November 21, 2005

The Pension Funds Surplus Trial Adjourned
The first phase of the trial regarding the $30.2-billion surplus taken from the Canadian Forces (CF), the Public Service (PS), and the RCMP pension accounts ended on Friday 18 November. Click here for more info.

November 15, 2005

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. To read more about this, click here.

On July 7, 2005, the Treasury Board (TB) Secretariat announced some changes to the three major public sector pension plans, i.e. those applying to the Public Service employees, the Canadian Forces members, and the RCMP members. A detailed description of these changes is posted on TB Web site and on the Canadian Forces Web site.

1. Increase in employees and members contribution rates

· On the portion of salary up to the maximum covered by the CPP/QPP
from 4% to 6.4% gradually from 2006 to 2013

· On the portion of salary exceeding the CPP/QPP
from 7.5% to 8.4% gradually from 2006 to 2008

Although this matter relates to employees and members, FSNA is very concerned that this decision has been taken when the matter of the pension surplus is now before the Court and is also concerned about the significant increase in the employees and members contribution rates being implemented before an actuarial evaluation of these superannuation plans is made.

2. Decrease in the reduction applied to the retirement pension at age 65

As explained in the above-mentioned Internet link, the CPP/QPP integration/coordination provision embedded in the three relevant pension plans will be eventually modified in order to decrease the amount of the reduction applying to the retirement pension at age 65 (or upon any earlier disablement as applicable). Indeed, the reduction factor would gradually be lowered beginning in 2008 from the current 0.7% reaching 0.625% in 2012. It is to be noted that this recommendation still needs parliamentary approval.

FSNA is very pleased with the announcement of this pension increase applicable to pensioners reaching age 65 in 2008 and thereafter. It is FSNA -- through the intervention of the former pensioners' representative (Allan McLellan) on the Canadian Forces Pension Advisory Committee -- that first brought the underlying issue to the attention of the government in 2001. The matter was thereafter handled by the Public Service Pension Advisory Committee, which made a recommendation to the President of Treasury Board in June 2004.

FSNA reacts to alleged misuse of RCMP pension funds by writing to the RCMP Commissioner.

Commissioner Giuliano Zaccardelli
Royal Canadian Mounted Police
1200 Vanier Parkway
Ottawa, ON K1A 0R2

The Federal Superannuates National Association (FSNA) is very concerned about the Audit at RCMP raises red flags article by Andrew McIntosh appearing in this morning's National Post. We sincerely hope that none of the reports about billing the RCMP pension funds for expenses unrelated to pensions are true. The alleged actions would be very serious abuses of the pension fund and a breach of the rights and expectations of those who contributed to the plan and the employees who are currently contributing.

FSNA, as you know, has a membership of more than 130,000 and represents retirees from the Public Service, the Canadian Forces, the Royal Canadian Mounted Police, and federally appointed judges. Its main objective is to protect the rights and benefits of pensioners under the superannuation plans. Some 5,000 of our members would be affected by the alleged misappropriation or misuse of RCMP pension fund.

Since your officials are quoted as saying that the audit is not complete at this time and that there is a review and follow-up actions being taken, FSNA will not make any official comments to the news media except to say that we have expressed our concerns to you and that we are awaiting a full disclosure of the facts. As you may know, FSNA is one of the plaintiffs in a court challenge to Bill C-78, questioning the authority of the Government to retire the surplus from the three superannuation plans. The actions reported in today's National Post article are similar in nature to the 'retirement' of pension fund surplus and are simplynot acceptable.

We expect that your review and follow-up actions will be completed promptly and that there will be a complete public disclosure of the facts. The pensioners have a right to know; indeed all Canadians have a right to know. I hope that you will keep FSNA informed of the developments in this case and I will be pleased to meet with you at your convenience.

The following is a status report prepared by the lawyers representing the plaintiffs in this legal challenge (FSNA is one of the plaintiffs).

Where is the case at?
Three lawsuits challenging the Government's taking of the surplus in the Public Service Superannuation Plan; the RCMP Superannuation Plan and the Canadian Forces Superannuation Plan are being pursued jointly by Court Order. The Ontario Superior Court has ruled that it has jurisdiction to hear the cases and that the federal unions pursuing the case are entitled to do so to protect the interests of public servants and other federal government employees. The lawsuits are now at the "discovery" stage. The Government has disclosed several thousand documents relevant to the issues in the case and all of these documents have been reviewed. These documents include financial data and analyses of the plans as well as hundreds of documents, many at the senior level, dealing with the Government's strategy for dealing with pension surplus. The availability of some cabinet documents remains unresolved.

Once review of the documents was completed, the oral examination phase of the discovery process commenced. The former head of the Pension Division at Treasury Board was examined under oath for a total of 10 days in February and April 2003, and the Comptroller-General has been examined on accounting and financial issues for several days in March and April. It is expected that examinations will be completed in the fall of this year.

When will the case be heard in Court?
Once the discovery phase is complete, the Court will schedule a Settlement Conference and assign a trial date. It is unlikely that the case will be tried before the fall of 2004.

What have we learned?
The discovery process has shed a great deal of light on how and why the Government dealt with the surplus as it did. Briefly, we now know that the Government's approach to dealing with the surplus was intimately linked to its desire to reduce the federal budget deficit in the mid-1990's. The Government discovered that accounting rules permitted it to quietly "amortize" the surplus and reduce the size of the stated budget deficit, even though the balances reported in the Superannuation Accounts would not be reduced. The net result, which was effectively hidden from employees, was the equivalent of a contribution holiday for the Government for much of the decade - a period in which employees continued to make their contributions in full. To make matters worse, one of the basic reasons for the emergence of the surplus in the first place was wage restraint and salary freezes! By 1995, $14 billion in surplus was already built into the Government's internal plan to reduce the deficit. None of these manoeuvres were disclosed to Treasury Board's Advisory Committee on Pension Reform, which included members from the federal unions.

In 1999, Treasury Board proposed a new "pension deal", but the Department of Finance refused to permit any discussion of sharing of surplus or transferring of the existing surplus to the new pension fund. Although it didn't say so at the time, the Government needed to use the surplus to meet its deficit reduction targets. When the employee side refused to agree to the Government's "deal", Bill C-78 was the Government's answer. Under this version of "pension reform", employee contributions increased and the Government retained all the surplus, which had by 2000 grown to about $30 billion.

Because it involves statutory pension plans, the case presents a number of new and groundbreaking issues. We remain committed to pursuing the case and to reversing the largest surplus grab in Canada.

November 8, 1999

Statement of Claim
To read the Statement of Claim that the plaintiffs represented by the Professional Institute of the Public Service of Canada Public served to the Attorney General of Canada, click here.

November 5, 1999

Bill C-78 Highlights
On 14 September, 1999, Bill C-78 " an Act to establish the Public Sector Pension Investment Board and to amend the Superannuation Acts, etc. " received Royal Assent. To see highlights of this Bill, click here.

June 29, 2004
Lawyers Status Report
The lawyers representing the plaintiffs in the pension fund surplus legal challenge prepared status reports of interest to both the employees and the pensioners. To read the latest report, click here

April 7, 1999
Why must the surplus be shared?
The Government argues that it has the right to future surpluses since it will bear the risk of future deficits. But it did not bear the full risk of the plan in the past, since contributors paid more than the expected cost of the plan. In fact, the surplus that arose as the result of the removal of explicit margins, is a measure of the excess contributions made by, or on behalf of, employees in the past, and should be distributed to them. To read more about this, click here.

April 7, 1999
Why not follow principles of the Pension Benefits Standards Act?
The Pension Benefits Standards Act (PBSA) is quite clear on the issue of what the employer must do and how the surplus distribution is to be determined in cases where the pension plan does not specify how a surplus is to be withdrawn. To read more about this, click here.

April 21, 1999
Angry pensioners feel let down
The Federal Superannuates National Association (FSNA) condemns the federal government's opportunistic attitude in regards to the $30-billion pension surplus. Pensioners call for a fair and equitable sharing of the pension surplus among the employer (taxpayers), employees, and pensioners. To read the full media release, click here.

April 28, 1999
Presentation to House of Commons
To access the full text of the presentation made by National President Rex G Guy to the Standing Committee on Natural Resources and Government Operations, click here.

Pension Offices
The addresses and telephone numbers of the pension offices were published in the You and Your Survivors workbook that was distributed to all FSNA members. For an up-to-date version, click here.

The increase in indexing that will be applied to Public Service, Canadian Forces, and RCMP pensions in January 2005 will be 1.7 per cent.

Pension Increase for 2004

The pension increase for 2004 is 3.3 per cent. For those who retired in 2003 and are entitled to indexation, the increase will be pro-rated based on the number of full months in 2003 after the retirement date. The increase for 2004 will be more than the year-over-year inflation published by Statistics Canada. This is because the pension increase rate is based on the increase in a 12-month average CPI level ending in September, which results in a somewhat different amount than the year-over-year calculation. Last year the pension increase was smaller than the year-over-year calculation. The two methods average out to be the same over time.

As indicated in the Spring 2001 issue of ON GUARD, FSNA continues to monitor the progress being made in implementing the various pay and pension increases generated by the pay equity settlement reached some time ago between the Public Service Alliance of Canada and Treasury Board. We have learned that the Public Service Pension Office now has the information it requires to begin processing 'pay-equity' increases to affected pensions. At present, it is anticipated that these increases, and the issuing of 'back-payment' cheques, will be complete by the end of this year. It is pointed, out, however, that there is no provision for the payment of interest on these 'back-payments'.

On Saturday 31 March 2001, the Ottawa Citizen reported that a Federal Court of Canada decision has recently awarded the widow of a former public Servant the unreduced amount of the participant's Supplementary Death Benefit (SDB) even though he was 69 at the time of death. The provisions of the SDB for the Public Service are that benefits decline by 10 per cent of the initial amount each year until the minimum amount of $10,000 is reached.

FSNA is currently assessing the situation for possible implications for our members.

The SDB for Public Servants was recently improved along with changes to the Superannuation Act. Those changes and the provisions of the SDB were reviewed in the winter 99 issue of ON GUARD.

On Sunday 1 April 2001, the Ottawa Citizen reported that the government is planning to review the Superannuation Act along with its review of the terms and condition of employment in the Public Service.

Such a periodic review of the plan is normal. It would appear that this review will be in conjunction with a significant review of all terms and conditions of employment in the Public Service. The latest round of amendments to the plan were implemented with Bills C-71 and C-78 in 1999 and C-21 in 2000.

The Executive Director of FSNA is the pensioners' representative on the Public Service Pension Advisory Committee and represents all Public Service pensioners. This Committee reviews all proposed changes to the Public Service Superannuation Act, and makes recommendations to the Minister. FSNA, through the pensioner's representative and directly to the Minister, has asked that several benefit improvements be implemented.

As is normally the case, we expect that any changes to the Superannuation Plan will not reduce benefits in any way for current pensioners nor will they reduce the accrued benefits of current employees.

It is unclear at this time to what extent, if any, changes to the Canadian Forces or RCMP superannuation acts, or to the Judges Act will follow from changes to the Public Service Superannuation Act.

Editor's Note:
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. 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 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 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.

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.

"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.

It says that FSNA was advised by legal expertsthat 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.

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!