Chair – Harpinder Sandhu
The next Public Service Pension Plan Advisory Committee meeting is scheduled for May 2013.
I have created a temporary email address for the committee chair, which will be up for approval next meeting.
Recent Pension Related News:
Federal government can withdraw surplus from its employees' pension plans and take contribution holidays, Supreme Court rules
Upholding decisions of the Ontario Superior Court and the Ontario Court of Appeal, the Supreme Court of Canada has ruled that the federal government is free to withdraw the surplus from pension plans that it provides for public servants, members of the RCMP and members of the Canadian Forces, and to take contribution holidays with respect to those plans. The Court ruled that the government's so-called Superannuation Accounts are simply legislated records and do not contain assets in which the plan members have a legal or equitable interest. In the Court's view, the members' interests are limited to the defined benefits to which they are entitled under the plans, the government does not owe them a fiduciary obligation, and is not unjustly enriched by the removal of the pension surpluses, and the plan members have no legal or equitable interest in the actuarial surplus reflected in the Superannuation Accounts.
The high court upheld previous lower court rulings and found the pension accounts were not separate funds with assets but “rather accounting ledgers used to track pension payments” and to estimate the government’s future pension obligations in its financial statements or the Public Accounts.
With no assets in the plan, the court rejected claims that employees and retirees had an “equitable or legal” interest in the plan and that the government had a fiduciary duty as the plan’s administrator to put members’ interests first.
If the accounts were just records, the court determined, employees and pensioners couldn’t suffer “any detriment” by the government’s accounting treatment and decision to amortize the surplus against the deficit. The court said employees have no “property interests” in their contributions which were “costs” they paid for their future guaranteed benefits.
By the 1990s, the accounts started to post a surplus which exploded as the decade wore on, hitting $30 billion by 1999. It mushroomed for a number of reasons — low inflation rates, high interest rates on government bonds, a six-year freeze on public service salaries, caps on indexation benefits and changing assumptions on how to calculate the plan’s liabilities.
The recent Supreme Court decision outlines how valuable Public Pensions are, not only to public servants which pay into the program but governments that benefit from any surpluses that arise outside of the defined benefit provisions.