Pension Surplus

Pension Surplus Decision Disappoints ACFO

OTTAWA – “The decision by the Ontario Superior Court of Justice dismissing the unions’ legal challenge on the public sector pension surplus litigation is a bitter disappointment to ACFO and its’ 3,600 Members” said Milt Isaacs, Chair of ACFO.

ACFO undertook this legal action in 1999, in concert with 17 other federal unions, employee associations and retiree groups. Together these groups represent more than 300,000 combined memberships across Canada whose pensions were affected by the Employer’s action.

The court challenge was mounted in response to the passage of Bill C-78, the Public Service Pension Investment Board Act, that allowed the federal government to appropriate an estimated $30.2 billion from the superannuation accounts of the public service, RCMP and Canadian Forces employees.

The decision of Justice Panet is disappointing in that he essentially accepted the Employer’s position that the plan is governed exclusively by the terms of the legislation and that the Employer’s only obligation was to comply with the legislation. He found that it did so. He also found that the Superannuation account was not a “funded” account that held assets but was rather a statutorily-established device for tracking the Employer’s pension liability. He also found that the Employer had no discretion over the operation of the Account and that it therefore had no fiduciary obligation to contributors.

The next steps for ACFO will be to review the 102-page decision and discuss possible courses of action, including appealing the decision.

2007-11-27T00:00:00

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