Supreme Court Favors Government in $28B Pension Repayment Case

The Supreme Court of Canada gave a decisive judgment declaring that numerous public unions are not entitled to the $28-billion pension surplus which the government hoarded off for paying deficits. The judgment was announced unanimously with a 9-0 support at high court, declaring that the government is not at all indebted to pay funds to the public sector unions. Justice Marshall, Rothstein, wrote in his judgment that “the government was not under a fiduciary obligation to the plan members, nor was it unjustly enriched by the amortization and removal of the pension surpluses.”

The judgment comprised on multipart 73-page ruling, which ended a long-fought legal battle dating as back as 1990s in which the union fought on behalf of public servants, the RCMP and the military, which all wanted the surplus money returned. The union had challenged a previous ruling of Ontario Court of Appeal ruling which also stated that government is not obliged to pay the money. The union states that the government improperly took their money, which they were entitled to. These pension plans are one of the most favorable pensions plans of the country, in comparison to what other private sector companies are offering.

Rothstein wrote in his statement that “the plan members’ interests are limited to their interest in the defined benefits to which they are entitled under the plans.” He added that “the effect of this ‘amortization’ was twofold: it reduced the government’s annual budget deficit (or increased the annual budget surplus) by reducing annual pension expenditures, and it 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.”

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