Pension Surplus Balloons to $42 Billion – Expert Witnesses Support Plan Members' Claims to Surplus
OTTAWA – The pension surplus litigation trial resumed this week after a recess for March break. The Court heard testimonies from expert witnesses who endorsed the rights of contributing members to the public service pension account, RCMP account and Canadian Forces account to legitimately lay claim to a good portion of the surplus.
Don Lee, a pension analyst with particular expertise in attribution analysis, told the Court that a significant portion of the surplus can be attributed to plan members’ contributions: 42.2% in the public service pension account, 32.1% in the RCMP account and 25.6% in the Canadian Forces account. His analysis showed that the Employer has withdrawn more than its fair share of the surplus from each of the three pension accounts.
Scott Milne, an expert in public-sector accountancy and a former auditor with the Office of the Auditor General, told the Court that pension accounts are “non-budgetary” Specified Purpose Accounts. Created under provisions in the Financial Administration Act, funds in these accounts cannot be used to pay for government programs or used for any purpose other than the pension benefits of plan members.
Mr. Milne also testified that the surplus in all three pension accounts has now increased to $42.7 billion due to interest and actuarial evaluations. About $29.18 billion of the surplus was taken by the government from 2000 to 2006, but about $12.97 billion remains in the accounts.
Presentations of evidence and expert testimony will continue until April 13, 2007.
The Association of Canadian Financial Officers is committed to keeping its members updated and will provide more information as the case progresses.
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