In my opinion:
In Canada if there exists a law requiring a private company, or person to do something, then that law also applies to the government as well. Furthermore the government does NOT have the right to exclude itself from any law it passes. That is the very basis of the Magna Carta. And as long as the Queen is still head of state, then NO government in Canada has the right to pass a law that excludes itself. Something that is all too frequent in this country. It’s time it was stopped and our courts reminded of the facts.

Please read on: to learn more about government fraud?

My Understanding:
In 1999, Parliament passed legislation, Bill C-78, amending the superannuation acts and enacting the Public Sector Pension Investment Board Act. The passing of Bill C-78 followed stalled negotiations between the bargaining agents, the pensioners’ representative and the employer in 1998. At the core of those stalled negotiations was how to address the matter of surplus pension funds.

The effects of the bill were to create a new pension fund for benefits earned after April 1, 2000; to create an investment board to manage amounts transferred to the government under the superannuation legislation for market investment; to improve the annuity by basing the pension calculation on the five consecutive best-paid years of service; to separate employee superannuation and CPP contributions; and to change the manner in which contribution rates are set. A key provision of the bill allowed excess amounts accumulated before April 2000 to be debited from the Superannuation Accounts. This last point is the crux of the pension surplus debate.

Under the superannuation legislation, employees contribute a proportion of their salaries to the pension fund each working year, and the government makes a payment in kind on behalf of the employee. An employee is generally entitled to a pension at retirement, based on his or her years of service and annual salary. Since pension contributions are made over the course of a career, and only paid out once an employee retires, it is possible for a surplus of funds to accumulate. It was estimated that between 36.9 and 42.2% of the surplus in the Public Service Pension Account alone was attributable to employee contributions and the interest thereof. It was also estimated that the total pension surplus grew to more than $30 billion by 1999.

A portion of Bill C-78 allowed the government to amortize the surplus funds from the CF, PS and RCMP superannuation accounts during the 1990s, and to withdraw the remaining surplus amounts. Over the course of 15 years, beginning in 1991, $28 billion in surplus pension funds were amortized and assigned to purposes other than pension funding. The unions and pensioners argued that this method of accounting allowed the government to pay down its deficit by using monies that had been set aside for pensions, while taking contribution holidays. They argued that by virtue of its role as pension plan administrator, the government had a fiduciary duty to keep the funds segregated, and to use contributions solely for the purpose of funding the pension plan.

On the government side, Mr. Southey argued that the only obligation that the government has to employees in this regard is to pay them the appropriate pension amount at the right time. There is no general right to funds that are paid in to the Consolidated Revenue Fund, other than what was promised under the pension legislation. As long as pensioners receive the pensions promised, the government is meeting its obligations. He also argued that the private law concept of fiduciary duty does not apply where the Crown has not explicitly created the duty in legislation.