Gov't Unions Lose 30B Pension Case

The ruling comes at a time when pensions are top of mind for thousands of baby boomers, who are retiring from the public service in record numbers over the next decade. Some predict the ruling, which suggests the government can do whatever it likes with the pension plan, will prompt a campaign among workers to gain more control over their pension plans. Panet concluded that the pension accounts weren't "funded" with real assets and the unions failed to prove the accounts had the key characteristics of a trust fund. With no trust fund, the government couldn't have breached its "fiduciary" obligations, as the unions argued, when it amortized the surplus and used it to offset the deficit between 1990 and 2000. Even if the unions and pensioners had an interest in the surplus, Panet said the government had the legal authority to take it all when it passed Bill C-78, the legislation that allowed the government in 1999 to claim the surplus and book it against the debt. The bill also created a new pension fund that is now invested in the market. The unions had argued Parliament didn't intend for the government to take the whole surplus, but Panet said Parliament's intent was "clear and unambiguous." ... http://www.canada.com/topics/news/national/story.html?id=39cee4a8-c0a3-42d1-97b3-c87fe75a58ee [Proofreader’s note: this article was edited for spelling and typos on November 21, 2007]

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