Understanding the Public Service Pension Fund Surplus

Recently, concerns have been raised about the federal government’s ability to access pension surpluses. We are closely monitoring this issue and collaborating with other public service unions and organizations to ensure our collective retirement security is prioritized. While pension surpluses rarely ever benefit the employees who fund it, the pension fund is stable and there is no immediate threat to our pensions.

 

Here is the background:

The pension plan is governed by the Public Service Superannuation Act (PSSA). Under this law, any surplus beyond 10% of the fund’s liabilities (non-permitted surplus) can potentially be used by the government for other purposes.

 On November 25, 2024, a non-permitted surplus in the Public Service Pension Fund was revealed in a statement by Treasury Board President Anita Anand. At the same time, the federal government announced its intention to move approximately $1.9 billion from the Public Service Pension Fund to the Consolidated Revenue Fund and explore the next steps — effectively taking the surplus and moving it to the federal government’s central account at the Bank of Canada.

 

Here’s what you need to know:

The Pension Fund is stable. The fund is well-managed and has been growing over time. However, when surpluses occur, they rarely ever benefit the contributors—employees and retirees—who fund it.

Past actions have set a precedent. In the late 1990s and early 2000s, the government withdrew $28 billion from pension surpluses, sparking legal challenges.

Protections are in place but could be stronger. The 10% cap on surpluses was introduced to avoid excessive government access. However, the AJC believes that any surplus should be used to improve benefits or reduce employee contributions, rather than being reallocated.

If you have questions, please contact us. Together, we will continue to advocate for fair and responsible pension management.