The public service pension plan (PSPP) is a defined benefit pension plan that provides retirement income to federal public service workers, based on their salary and years of service. Funded by contributions from both employees and the government, it ensures financial security for retirees and includes provisions for survivors and disability benefits.

The plan is governed by the Public Service Superannuation Act and the Income Tax Act.

On behalf of the Government of Canada, the President of the Treasury Board is responsible for the public service pension plan.

The plan is administered by the Government of Canada through the Treasury Board Secretariat, which oversees the plan's policy and funding. Day-to-day operations, including pension payments and record-keeping, are managed by Public Services and Procurement Canada.

The plan is financially managed by the Public Sector Pension Investment Board (PSPIB), a Canadian Crown corporation established by the Public Sector Pension Investment Board Act. The PSPIB is governed by a 13-member board of directors, accountable to Parliament through the President of the Treasury Board.

A surplus in most pension plans occurs when the plan has more financial resources (assets) than it owes in promised benefits to members of the plan (liabilities). A surplus can occur due to higher-than-expected investment returns, lower-than-anticipated payouts, or demographic factors.

A pension surplus provides a financial cushion to ensure a pension plan can meet its future obligations even in adverse economic conditions.

A non-permitted surplus in a pension plan happens when the surplus exceeds the regulatory limits established by pension legislation, typically defined as a certain percentage of the plan's liabilities. 

According to the Public Service Superannuation Act, if the public service pension plan reaches a non-permitted surplus, the plan administrator – in this case the government - must take corrective actions—such as reducing contributions, enhancing benefits, or refunding the excess funds—to ensure compliance with the law.

The plan contains an anticipated $9.3 billion expected surplus.

On November 25, 2024, two actuarial reports on the public service pension plan were tabled in Parliament: the 2023 Valuation Report and a Special Report detailing the financial position of the PSPP as of March 31, 2024.

Anita Anand, President of the Treasury Board, subsequently announced a transfer of $1.9 billion from the pension plan into the Consolidated Revenue Fund, where the funds will remain while next steps are considered. PSAC will oppose any attempts to unilaterally allocate these funds.

Following the announcement, research by PSAC showed that Table 7 in the Special Report revealed the government intends to suspend its contributions to the PSPP from December 1, 2024, through July 31, 2027.

The total amount of the one-sided contribution holiday by the Liberal government adds up to $7.4 billion. This sum, combined with the $1.9 billion that is being held by the government totals $9.3 billion.  

The public service pension plan is well-managed and financially stable. While our union anticipated that actuarial reports would likely show a non-permitted surplus, PSAC was not informed of the surplus amount or the government's intended actions regarding the funds until the Minister's announcement on November 25, 2024.

It’s about fairness.

PSAC launched this national pension campaign to urge the Trudeau government to respect workers and keep its hands off pensions.

Workers and employers contribute together to the pension fund. So why should only the government get a break?

Pensions are sacred, and poaching pension funds from federal government workers and retirees sets a dangerous precedent for other employers in Canada who may be encouraged to do the same.

The government is the largest employer in Canada – if they get away with this, it will set a precedent for all workers. All Canadian pensions are at risk.

It’s not too late for the Liberal government to do the right thing. PSAC has proposed three fair and reasonable solutions to address the pension surplus while protecting retirement security:

1. 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, 2013, must work five years longer to reach full retirement. This inequality is fundamentally unjust, and
2. Provide equitable retirement options for frontline workers: Follow through on the governments commitment to provide equitable retirement benefits for frontline public safety workers, and
3. 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 equity.

Members of the public service pension plan do not have direct decision-making authority in the administration of the plan.

These groups are represented by the Public Service Pension Advisory Committee, which is an advisory body established under the Public Service Superannuation Act. The committee includes representatives from unions, retiree groups, and employer organizations.

Its role is to provide advice to the Treasury Board of Canada Secretariat on pension administration and policies and offer a forum for stakeholders to raise concerns or suggest improvements.

However, the committee’s role is advisory, and it does not have decision-making authority – the government retains ultimate control over the plan's administration and policy decisions.

This structure is set out in the legislation.

PSAC remains committed to advocating for fairness for our members. Legal cases may take time, but members and the public can make a difference now by urging the government and politicians to reverse this decision and ensure pension fairness for federal workers.

Your voice matters, and it’s not too late to act. Visit stoppensiontheft.ca, sign on to the campaign and send an email to your MP.

In 1999, the government introduced Bill C‑78, which came into force on April 1, 2000.  It made significant changes to the Superannuation Acts – the laws that governed pensions at the time – and changed the way in which contributions to federal public sector pension plans were collected, managed and distributed. This permitted the government to reduce actuarial surpluses in their pension accounts by over $28 billion.

This was an accounting move that served to reduce the government's annual budget deficit (or increased the annual budget surplus) by reducing annual pension expenditures and brought the government's net debt down by reducing the net pension liabilities to an amount closer to the actuarial estimates of the government's future pension obligations.

PSAC and other groups challenged Bill C-78 in court, arguing members that had contributed financially to the plan had an equitable interest in the surplus. The trial judge dismissed the claim, and the Ontario Court of Appeal upheld the decision. The fight was taken to the Supreme Court of Canada, where the court ultimately dismissed the appeal with reasons.  

For more information, see Professional Institute of the Public Service of Canada v. Canada (Attorney General) [2012] 3 SCR 660. Note PSAC was also an appellant in this case.

In 2024, the Liberal government actively removed $1.9 billion from the pension fund and transferred the funds to its own account. Additionally, the government intends to suspend their contributions to the pension from December 1, 2024, through July 31, 2027, a savings of $7.4 billion not being passed on to workers. This is fundamentally unfair.

Visit stoppensiontheft.ca, sign on to the campaign and send an email to your MP.

Together we can protect pensions for all workers.