Friday, May 6, 2011

Supreme Court grants PSAC leave to appeal pension surplus case

May 6, 2011

Ottawa (24 May 2011) - The Supreme Court of Canada has granted the Public Service Alliance of Canada (PSAC) application for leave to appeal a longstanding pension case.

In October 2010 the Ontario Court of Appeal dismissed PSAC's case against the federal government for expropriating $28 billion from the federal superannuation fund.

At issue is the fact that the federal government raided a $28 billion surplus from the public service, RCMP and Canadian Forces pension plans after passing legislation that restructured the way the plans are managed.

PSAC claims that the government breached the trust of plan members, violating its fiduciary duty and not meeting its obligations.

In addition, PSAC maintains that the removal of $28 billion in pension contributions, impacting 700,000 employees, is a matter of national importance.

The union believes that the trial judge incorrectly concluded that the Superannuation Accounts had not accrued assets. The evidence clearly demonstrated that the government was required to and did put aside real funds to deal with its pension obligations, along with funds collected from plan members' contributions.

PSAC also disagreed with the trial judge's conclusion that the government had no fiduciary obligation toward plan members and toward their interest in the surplus. The evidence presented in the case established that this was true.

The Court of Appeal found that the federal government did have the discretion to remove the surplus funds, even if it resulted in higher pension contributions for plan members. PSAC believes that the government must be held to account for its actions and that the funds should be restored to the pension fund.

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