Public Service Alliance of Canada calls on government to ensure pension surplus goes to workers and not o federal coffers

BY PAUL JUNOR

The issue of what to do with the federal public service pension surplus of $9.3 billion is of significant concern to more than 700,000 federal public service workers, retirees, and territorial government employees. The federal government has expressed an interest in utilizing the surplus and this has prompted the Public Service Alliance of Canada (PSAC) to launch a national campaign to bring awareness of the government’s plan. PSAC released information in a press release on Wednesday, November 20^th, 2024, to express its concerns about the government’s planned actions.

Sharon DeSousa, National President of the PSAC states, “This is a betrayal of trust. Workers and the government contribute equally to this pension fund, but now the government is taking a break while workers are left to shoulder the burden.” PSAC believes that the government’s desire to put its hands on the surplus pensions would be a precedent-setting move. It could prompt private and public employers to do the same thing to their employees’ pension plans. This is an essential issue for the largest public sector union in Canada. “This is more than a fight for public sector workers; it is a fight for everyone who believes in: fairness, accountability, and the retirement security of workers.” National President Dsouza notes further, “If the federal government (the largest employer in the country) can raid its own workers’ pensions, what stops other employers from doing the same thing?”

PSAC is optimistic and hopeful that the federal government will reverse its course of action as it is still early. They have presented three possible solutions to protect retirement security and tackle the pension surplus. These include:

• Reverse the two-tier system:

Reverse the two-tier system introduced by the Harper government in 2012. Under the Harper changes, federal workers who started their jobs on, or after January 1^st, 2013, must work five years longer to reach full retirement. This inequality is fundamentally unjust.

• Equitable retirement options for frontline workers:

Follow through on the government’s commitment to provide equitable retirement benefits for frontline public safety workers.

• Suspend employee contributions:

If the government gives itself a contribution holiday, workers who equally pay into the pension plan should get one too, ensuring fairness and equality.

DeSousa states, “This isn’t about pensions; it’s about fairness, accountability, and doing the right thing for the workers who serve Canada every day.”

In a press release on Monday, November 25^th, 2024, issued after the federal government’s announcement of a multi-billion-dollar surplus, PSAC notes that “This represented a once-in-a-generation opportunity to invest in the future of Canada’s public service, and righting the wrongs of the Harper era.” The press release referred to a report by the independent Chief Actuary of Canada, which acknowledged that there was a $1.9 billion surplus in the Public Service Pension Plan (PSPP) that is more than the optimal surplus allowed according to prescribed legislation. These funds will be transferred to the Consolidated Revenue Fund by the government.

PSAC is not pleased that federal workers who commenced on, or after January 1^st, 2023, have to wait five years later to get a full pension. For PSAC, “This inequality is fundamentally unjust.” President DeSousa notes, “Federal workers built this pension surplus through their hard-earned contributions, and taking these funds is a betrayal of their trust. It also sets a dangerous precedent for all Canadian employers who may now be eying the pension contributions of other public sector workers.”

PSAC believes that the transfer of these funds into general government revenues rather than to alleviate the unfair two-tier pension system is inherently unfair. PSAC has offered a cost-neutral policy to the government to undo the policies introduced by Harper and will continue its fight to ensure these funds are allocated equitably. “PSAC is determined to express opposition to any actions by the federal government to divert these funds,” DeSousa notes. “A two-tier 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 confirmed to support and recruit into the public service. If the government is serious about equity and inclusion, we need fair retirement benefits for everyone.”

In an email on Friday, November 29^th, 2024, PSAC announced that government’s actuaries revealed that $7.4 billion will be taken from the PSPP as it suspends employer contributions. The government has tabled measures indicating that it will pass the surplus to its coffers. President DeSousa states, “The decision by the government to put itself ahead of workers is wrong. They’re suspending employer contributions for the plan, but not investing in fairer pensions, or a contribution break for workers. That is a betrayal.”

PSAC is disappointed that the government did not engage in consultations with them and hid their true intentions hoping that they would not be found out. DeSousa notes, “The government could have given much-needed financial relief to some of the lowest paid workers in the federal government and make a fairer pension system in a revenue-neutral way, at no cost at all to taxpayers. The question is, why didn’t they?”

DeSousa expressed disappointment at the failure of the government to table pension reform legislation and ensure that frontline public safety and law enforcement workers have access to future equitable retirement benefits. “I spoke with the Prime Minister earlier this week. He must do right by these workers. It’s not too late.”