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Ontario Superior Court’s decision in pension account litigation

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  • In September 1999, the Public Sector Pension Investment Board Act was passed by Parliament providing for improvements in the financial management of the public sector pension plans, namely the Public Service (PS), Canadian Forces (CF) and the Royal Canadian Mounted Police (RCMP). The new Act authorized the President of the Treasury Board to debit these three federal Superannuation Accounts (PS, CF and RCMP) in order to reduce the amount of certain excess credit balances in these Accounts. The Act also enhanced pension benefits, altered the way employee contribution rates are determined, initiated investment of pension funds through a market-based approach, and established a procedure for dealing with excess balances over actuarial obligations by authorizing the debiting of the Accounts.
  • In late 1999, a group comprising of public sector unions, employee and retiree associations representing over 300,000 pension plan members launched three lawsuits against the Crown claiming a right to the excess credited amounts in the three federal Superannuation Accounts.
  • The plaintiffs made three broad claims:
    • The first claim was that they had a legal or equitable interest in the excess (or surplus) amounts in the three Superannuation Accounts;
    • The second claim was that the new Act did not authorize the government, as the employer, to withdraw the excess amounts (or surplus) from the Superannuation Accounts; and,
    • The third claim was that the provisions of the new Act violate their equality rights under section 15 of the Canadian Charter of Rights and Freedoms
  • On November 20, 2007, the Honourable Mr. Justice Panet of the Ontario Superior Court dismissed the plaintiffs' three claims. The Court's decision found that the Government of Canada has fulfilled its obligations to the Public Service, Canadian Forces and the Royal Canadian Mounted Police pension plans. The court decision can be found on the Ontario Superior Court Web site.
  • The pension benefits of public servants were never at issue in this litigation. Pensioners and employees will continue to receive their pension benefits as promised by pension laws.

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