The federal government has once again transferred a significant surplus from the public service pension fund into its general revenues, drawing sharp criticism from the union representing federal workers. Treasury Board President Shafqat Ali announced on Thursday that approximately $900 million is being redirected, a move the Public Service Alliance of Canada (PSAC) calls a disappointment.
Union Calls for Reinvestment in Workers
PSAC National President Sharon DeSousa expressed strong opposition to the decision. She stated the union's consistent position is that any surplus generated by the Public Service Pension Fund should be reinvested to benefit the workers who contributed to it throughout their careers. "We're disappointed to see the government has once again pocketed the hard-earned pension contributions of federal public service workers," DeSousa said in a statement.
The union argues the funds should be used to address pension inequalities, specifically to reverse the two-tier pension system established in 2012 under the former Conservative government. That change increased the retirement age for public servants hired after 2013. DeSousa also suggested the money could help integrate the Early Retirement Initiative into existing workforce adjustment agreements.
Understanding the 'Non-Permitted Surplus'
This week's transfer follows a similar action last December, when the government moved $1.9 billion. The combined surplus now held in the government's Consolidated Revenue Fund at the central bank totals $2.8 billion. According to the Treasury Board, this fund is where the government deposits taxes and other revenues to cover public expenses.
The government states it is acting under legal requirements to address what is termed a 'non-permitted surplus.' This occurs when the assets in the pension plan exceed a legislated ceiling. Federal law provides the Treasury Board with options, including temporarily pausing contributions or paying the excess amount into the Consolidated Revenue Fund.
Ongoing Dispute and Next Steps
Public sector unions have repeatedly accused the government of using the pension surplus as a 'piggy bank' to fund its general operations, rather than using it for the benefit of plan members. The government and employees both contribute to the pension plan, and worker benefits are guaranteed regardless of the fund's performance.
In his statement, Treasury Board President Shafqat Ali indicated that the $2.8 billion will remain in the central bank account 'while next steps are considered.' This leaves the door open for future decisions on the massive sum, but does not appease union leaders who want immediate action to redirect the funds toward improving retirement benefits for their members.
