Newspaper article The Canadian Press

Public Service Unions Not Entitled to $28B Pension Repayment, Says Supreme Court

Newspaper article The Canadian Press

Public Service Unions Not Entitled to $28B Pension Repayment, Says Supreme Court

Article excerpt

Public service unions lose $28B pension fight

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OTTAWA - The Supreme Court of Canada says several major public unions are not entitled to a $28-billion pension surplus that the government hived off to help pay down the deficit.

The unanimous high court ruled 9-0 that the government is not obliged to return funds to the public sector unions.

"The government was not under a fiduciary obligation to the plan members, nor was it unjustly enriched by the amortization and removal of the pension surpluses," Justice Marshall Rothstein writes for the court.

The complex 73-page ruling ends a long legal battle that dates back to the 1990s in which unions representing public servants, the RCMP and the military wanted the surplus money returned.

The unions and professional associations were attempting to overturn an Ontario Court of Appeal ruling that said they weren't entitled to the money.

The unions argued that the government improperly took their money, from the mandatory, defined benefit plans.

The plans are among some of the most handsome pensions in the country.

Meanwhile, many private sector companies are struggling with underfunded pensions.

"The plan members' interests are limited to their interest in the defined benefits to which they are entitled under the plans," writes Rothstein.

The ruling comes as the government is attempting to slay the deficit and control public spending.

If the unions had won their appeal, it could have forced a massive federal expenditure that could have affected its long-term economic planning.

The ruling essentially affirmed the actions taken by the former Conservative and Liberal governments in the 1990s to take surplus funds from what had become lucrative public pension funds and apply them to country's deficit.

The total surpluses of plans for the three groups of federal employees -- public servants, the Canadian Forces and the RCMP -- had grown to $30.9 billion by 1999, the ruling states.

The ruling says the government began in 1990-91 to "amortize" the actuarial surpluses in its Superannuation Accounts. …

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