Treasury Board President Shafqat Ali announced on Thursday plans to shift nearly $1-billion from public-service pension fund to the government’s general revenues.Sean Kilpatrick/The Canadian Press
The federal government is shifting nearly $1-billion in surplus funds from the public-service pension fund into general revenues, a move that is legally allowed but sharply criticized by unions.
Treasury Board of Canada Secretariat Shafqat Ali announced the decision Thursday afternoon.
He said in a statement that independent actuarial reports show the public-service pension fund remains well managed and sustainable.
The Public Service Superannuation Act states that the size of the pension’s funded ratio cannot exceed 125 per cent. The Minister said the fund is at 125.5 per cent, meaning there is an excess surplus of “approximately $0.9-billion” as of March 31, 2025.
The government intends to transfer the non-permitted surplus to the consolidated revenue fund, a central government bank account, where it will be held along with last year’s non-permitted surplus. He said discussions with stakeholders about how those funds will be used “will be held as appropriate.” “Once the transfer is made, there will no longer be a non-permitted surplus in the fund,” the Minister said.
In a news release, the Treasury Board said the public pension plan is fully guaranteed by the Government of Canada. It notes that the government is required to top up the fund in the event that it falls into a deficit. This situation occurred between 2013 and 2018, when $2.8-billion in deficit payments were made to the fund.
Last year, Ottawa collected a $1.9-billion non-permitted surplus from the fund.
The Public Service Alliance of Canada has long criticized the practice of shifting surpluses into general revenue.
The union has a “Stop Pension Theft Campaign” on its website.
“Workers and employers contribute together to the pension fund. So why should only the government get a break?” the union says on its website. “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.”
PSAC has estimated that Ottawa is planning to collect $9.3-billion from the pension surplus between 2024 and 2027.
“PSAC will oppose any attempts to unilaterally allocate these funds,” the union said.