Surpreme Court rules feds were OK to take from pension plan surplus to pay down deficit in 1990s

Canada's former Prime Minister Jean Chretien



OTTAWA - The federal government under Jean Chretien had the right to take a $28-billion surplus from its employees' pension plan and use it to pay down the deficit, the Supreme Court of Canada ruled.

The Professional Institute of the Public Service of Canada and other public-sector unions and associations argued their members - retirees as well as active public servants, RCMP and military personnel -- were entitled to at least a portion of that money. The government countered that since retirees are receiving their pension benefits as required by law, they are getting what they're entitled to and do not have the right to share any surplus.

The case affects about 700,000 people.

The issue has been before the courts since 1999. The Ontario Superior Court sided with the government, a decision that was upheld in appeal in 2010.

On Wednesday the Supreme Court said the employees' and retirees' "interests are limited to their interest in the defined benefits to which they are entitled" under their pension plans, and have no right to share any surplus.

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