The federal public service pension plan has a surplus of $1.9 billion, according to a report presented to the House of Commons on Monday by Treasury Board President Anita Anand.
In a news release, Anand’s office said the government will transfer the “non-permitted 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 next steps are considered,” the news release said, adding the Treasury Board will continue to hold discussions with relevant stakeholders.
Under the Public Service Superannuation Act, a non-permitted surplus exists when the assets of a registered pension plan become 25 per cent greater than its liabilities.
“Federal public servants continue to benefit from a well-managed and sustainable pension plan and can be confident in its continued health in years ahead,” the statement read.
Surplus should go toward pension inequalities, union says
The Public Service Alliance of Canada (PSAC) said the surplus should be used to redress inequalities in the pension system caused under former prime minister Stephen Harper.
Pension reforms introduced in the 2012 federal budget by the Harper Conservatives made it such that public servants who joined before 2013 may retire at age 55 with 30 years of service, while those hired after 2013 must wait until age 60.
The public service union said those reforms created a “two-tier system” that is fundamentally unfair.
“Federal workers built this pension surplus through their own hard-earned contributions, and taking these funds is a betrayal of their trust,” PSAC national president Sharon DeSousa said Monday in a news release. “It also sets a dangerous precedent for all Canadian employers who may now be eyeing the pension contributions of other public sector workers.”
More than six months ago, the union presented a cost-neutral proposal to the government to divert a portion of the total surplus and “reverse the Harper-era attack on pensions,” the PSAC statement continued.
“A two-tier pension system is inherently unfair, especially for racialized, Black, Indigenous and young workers who make up the majority of recent hires — the same workers this government has committed to supporting and recruiting into the public service,” DeSousa said.
PSAC said it will analyze the recent Treasury Board report in further detail.
Both public servants and the Government of Canada contribute to the public service pension plan.