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The Supreme Court of Canada has rendered its decision on the appeal filed by federal public service unions in regards to the government’s appropriation of $28 Billion from the Public Service Superannuation Investment Fund.
The central legal issue of the case was whether contributing public service employees were entitled to be compensated for actuarial surpluses stemming from their pension benefit scheme.
In a unanimous decision, the Supreme Court of Canada upheld the decision of the Ontario Court of Appeal and found that contributing public service employees do not have an equitable interest in actuarial surpluses.
The Court’s decision rests heavily on the finding that there were no real assets (in the sense of money, investments or property) in the Superannuation Accounts. According to the ruling:
The Superannuation Accounts are just accounting records and they are not funds, nor are they trust-like, such that it is possible to borrow from them.
As soon as contributions were made to the Superannuation Accounts, they were transferred to the Consolidated Revenue Fund and became part for the public purse. There is no general right to funds that are paid in to the Consolidated Revenue Fund, other than what was promised under the pension legislation.
Simply put, as long as public service employees receive the pensions promised, the government is meeting its obligations. The Court rejected the argument that this use of pension benefits unjustly enriched the government and breached fiduciary obligations.
The Association is obviously disappointed with this ruling. That said, ACFO respects the Supreme Court judgement. Our concerns were voiced loudly and clearly, but ultimately the Supreme Court has made a final decision in this matter. This was the final step in the appeal process.
It is important to note that this decision does not absolve the government of their commitment to meeting their financial obligations with regards to public service pensions. Contributing public service employees will continue to receive their pension benefits as scheduled.
Rest assured that the Association will always employ every resource at its disposal to defend the interests of FIs. ACFO continues to work on behalf of FIs to achieve fair and equitable compensation, to protect your workplace rights, and to foster professional training and development opportunities for the financial management community.