The federal public employee pension system has a surplus of $1.9 billion, according to a report submitted to the House of Representatives on Monday by Finance Chair Anita Anand.
Prime Minister Anand’s office announced in a news release that the government will transfer the “unauthorized surplus” to the Consolidated Revenue Fund, a central account at the Bank of Canada where all funds paid to the government are held. .
The money will be held there “while we consider next steps,” the news release said, adding that the Finance Committee will continue to consult with relevant stakeholders.
Under the Public Employees’ Pensions Act, a disallowed surplus exists if a registered pension scheme’s assets are 25 per cent greater than its liabilities.
“Federal civil servants continue to benefit from a well-managed and sustainable pension system, and we can be confident in its continued health for years to come,” the statement said.
Unions say surplus money should be used to address pension inequality
The Public Service Alliance of Canada (PSAC) said the surplus should be used to correct inequalities in the pension system caused under former Prime Minister Stephen Harper.
Under pension reforms introduced by the Harper Conservatives in the 2012 federal budget, civil servants who joined before 2013 can retire at age 55 after 30 years of service, while civil servants hired after 2013 must wait until age 60. It was decided that it would not happen.
Public employee unions argued that these reforms created a “two-tier system” that was fundamentally unfair.
“Federal employees have built this pension surplus with their own hard-earned contributions, and receiving these funds is a sign of their trust,” PSAC National President Sharon DeSousa said in a news release Monday. It’s a betrayal.” “This also sets a dangerous precedent for all Canadian employers who may be looking at the pension contributions of other public sector workers.”
The PSAC statement further said that more than six months ago, the union submitted a cost-neutral proposal to the government to divert some of its gross surplus and “reverse the Harper-era pension attack”.
“A two-tiered pension system is inherently unfair, especially for racialized Black and Indigenous people who make up the bulk of recent employment, and the same workers that the government has supported and worked to recruit into the civil service.” It’s not fair to young workers,” DeSouza said.
PSAC said it would analyze the recent Finance Committee report in more detail.
Both the civil service and the Government of Canada contribute to the Civil Service Pension Plan.
