$1.9 billion is set to be transferred to general revenue, union wants the money invested in members
The Federal Government’s decision to transfer $1.9 billion in surplus from the Public Service Pension Plan (PSPP) to its general revenue has been harshly criticized by a body representing public service workers. The Professional Institute of the Public Service of Canada have called the decision a “raid.”
"This isn't just free money plucked from Santa's sleigh. This is our members' money, their deferred salaries," said Jennifer Carr, President of PIPSC. "Federal workers contribute 50% of the money that goes into the pension fund, yet are receiving 0% of this added surplus."
The $1.9 billion exceeds the allowable surplus from the PSPP. Much of that excess surplus is the product of “exceptional investment returns” of 18.4 per cent in 2021 and 10.9 per cent in 2022, according to a press release from the PIPSC.
"Imagine a bank telling a Canadian that, even though their investments did exceptionally well, the bank is going to take the profits," continued Carr. "It sounds almost criminal."
In the same release, PIPSC alleged that the government would use this money to pay for its “poor decisions” including outsourcing. They allege that the decision was made unilaterally. They also highlight a wider freeze on government spending and the likelihood of layoffs to permanent employees.
The government is, however, mandated by the Income Tax Act to use this surplus, as the Act limits the total surplus a pension fund can have. Some, including PIPSC, argue that moving the funds to a general revenue account, was not the only course of action the government could have taken here.
"If our members' pension contributions can help solve the government's fiscal challenges, those same funds should be used to protect their jobs," said Jennifer Carr. "'A well-managed and sustainable fund' should mean fair treatment of contributors, not just financial metrics."
