By Muskan Arora
The Canadian government announced transferring $1.3bn surplus from the Public Service Pension Fund – belonging to federal government employees- to the Consolidated Revenue Fund of Canada (CRFC), on 25th November. The transfer is being condemned by one of Canada's largest unions.
CRFC is a government account into which taxes
and revenues are deposited and funds are withdrawn to cover the expenses of
public services.
“Like all registered pension plans in
Canada, under the Income Tax Act the public service pension plan has a
legislated limit to the amount of surplus that it is legally permitted to carry,”
said Anita Anand, president of the Treasury Board, in a recent statement.
The president discovered that the public
service pension plan had surpassed its permitted level of surplus at $1.3bn as
of March 31.
Once the transfer is completed, the funds will be held back as “next steps” will be considered.
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“As considerations and next steps are explored, discussions with relevant stakeholders will continue,” added the president.
The Public Service Pension Fund’s total
value of assets was C$186bn as of March 31, as the plan is responsible for managing
the pension assets for public sector pension plan.
A spokesperson for the C$264.9bn PSP said, “The role is limited to ensuring readiness to all the possible options the government can take in the event of a non-permitted surplus under the current legislation.”
However, one of Canada’s largest unions,
the Public Service Alliance of Canada had condemned this transfer.
“PSAC is disappointed the government failed
workers by not using the surplus to reverse the unfair two-tier pension system
introduced by the (former Prime Minister Stephen) Harper Conservatives in
2012,” said the union in a Nov. 26 statement.
“Under the Harper changes, federal workers
who started their jobs on or after January 1, 2013, must work five years longer
to reach full retirement. This inequality is fundamentally unjust,” added the statement.
PSAC handles approximately 240,000 workers
across Canada, including federal government departments and agencies and crown
corporations.
