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February 14, 2013 - No. 18 Hands Off Pensions and Benefits Supreme Court Legalizes Government Expropriation Without Compensation of Federal Public Service Pension Funds   Hands
Off
Pensions and Benefits Hands Off Pensions and Benefits Supreme Court Legalizes Government Expropriation without Compensation of Federal Public Service Pension FundsWorkers across the country have denounced the Supreme
Court's February 1 decision sanctioning the theft of workers' pensions
in the Indalex Ltd. bankruptcy fraud. This decision confirms that
pensioners should be pushed to the back of the line of creditors in Companies'
Creditors
Arrangement Act (CCAA) bankruptcy proceedings. This is the second decision in just over a month in which the grandees of the Supreme Court have given their legal blessing to the looting of workers' pension plans in both the private and public sectors.
Legislation passed in 1999 ended the payment of public service pensions from the superannuation account and established separate public service pension funds. During this "reform," billions in employee and government contributions were declared surplus and grabbed by the government. Looting the public service pension plans was part of the anti-social offensive of the Chretien-Martin government carried out in the name of deficit reduction. It included changing Employment Insurance (EI) in a way that let the government steal $54 billion from EI funds.
In their decision, the Supreme Court justices declared that the pension contributions were merely legislated records and do not contain any real assets. Therefore, the Court says, "Plan members have no equitable interest in the surpluses in the superannuation accounts." The justices excused the crime of stealing the surplus, which would have gone to retirees in pension benefits, because they could not find criminal intent in the 1999 legislation. The decision states, "Parliament did not intend any compensation to be given to the Plan members for these debits, whether or not this constituted expropriation."
This outrageous admission that in Canada theft of this scale carried out by governments goes unpunished shows the workers and all Canadians as clearly as clear can be what they are up against. The full weight of the courts, Parliament and all of the instruments of political power controlled by the rich minority are being brought to bear in the attack on what belongs to workers by right. The pensions of workers in both the public and private sector are theirs. To now declare that laws do not confirm this merely shows that these laws are not worthy of the name. Workers must step up the mobilization of the strength of their numbers and organization to counter these attacks.
A very important inquiry into this and similar cases is needed to find out where the money went from government looting of pension funds and EI. Who made the big score at the workers' expense? Behind talk of austerity and eliminating debts and deficits are criminal pay-the-rich schemes that must be exposed and ended.
Stop Paying the Rich! Increase
Investments in Social Programs!
Ontario Government Unilaterally Freezes Contributions to Teachers' Pension PlanIn its last budget, the McGuinty government announced a five-year freeze in funding to the Ontario Teachers' Pension Plan. This unilateral action tore up an agreement with the teachers and education workers' unions. The freeze will lower government contributions into the plan according to the level of inflation. The freeze is not part of any negotiation and has been imposed without regard for the damage this will do to the plan and its viability. The plan is no longer protected against inflation unless other actions are taken to make up for the lower government contributions.
Flaunting its austerity agenda to reduce the provincial deficit, the government has imposed a deficit on the teachers' pension plan and a reduction of pension benefits. Without the government paying more into the pension plan according to inflation, which was the long held arrangement with teachers, the plan becomes increasingly weakened. The freeze also harms the plan when other factors are considered such as increased life expectancy. These result in a fund deficit and greater pressure to reduce pension benefits beyond that of losing the current level of inflation protection and lower benefits resulting from lower real wages. No matter what the return on investment a fund may receive, the only sure way to guarantee pension benefits according to an agreement is for new contributions to be made by the employer, which in this case is the government. No fund can sustain retirees at a given inflation protected benefit rate without enough added-value regularly put into it from contributions in addition to any return on investment. Pension benefits have to come from added-value in the present in the form of contributions and return on investment. Higher returns into a plan usually mean higher interest rates, which result in a higher discount rate and lower projected plan deficit. However, higher interest rates reflect greater inflation. If the pension benefits are not fully protected against inflation, even with higher investment returns the actual pension benefits will go down. Pension benefits must come mainly from added-value in the form of goods and services produced in the present. This means that goods and services (represented as money) must come from the economy in the present to sustain those who are receiving retirement benefits. That is an important aspect of the agreement the working class makes when it exchanges its capacity to work for wages, benefits and pensions. The exchange means that workers have a claim on a certain portion of goods and services at a Canadian standard during all three main segments of the life cycle: childhood, maturity or working years and retirement.
All these measures are a direct attack on the claim of teachers and their Canadian standard of living, which they receive in exchange for the important work and service they provide in adding value to Canadians and society through education. The anti-social austerity agenda means a transfer of wealth away from teachers to finance capital. This transfer of wealth takes money away from education generally and even out of the economy altogether. Teachers and other education workers can defend their security and rights through organized actions with analysis. They must discuss and think about a new direction for the economy and Ontario politics.
Air Canada Found Guilty of Misconduct in Aveos Case Quebec Superior Court Judge Rules
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On December 19, 2012 the
Court made a decision upholding the theft of $28 billion from the
pension plans of federal public sector workers in 1999 by the
Chretien-Martin government. The unions and associations representing
most federal public sector workers and personnel in the RCMP and armed
forces have been fighting this case for 13 years. They presented
evidence that $28 billion had been improperly taken out of their
pension plans by way of fraudulent government accounting. The
government withdrew pension contributions deemed "surplus" and gave
itself contribution holidays amounting to $28 billion in losses for the
Federal Public Service Pension Funds.
With the unilateral
imposition of a new arrangement and a growing pension plan deficit, the
government has forced teachers, education workers and their unions into
a fraudulent choice to accept decreases in pension benefits, changes to
the plan's actuarial assumptions or both. Inflation protection
(indexing) for new hires has been eliminated, which lowers benefits for
that particular group. The plan's discount rate was raised on the
assumption that interest rates will go up. Both those measures reduce
the projected plan deficit. The government imposed two-year wage freeze
also has the effect of lowering pension benefits thus reducing the
deficit. Reducing deficits by transferring money away from the people
and social programs and giving it to finance capital seems to be a
favourite blood sport of the Ontario government.
Through its unilateral
actions to impose a contract and make changes to the pension agreement,
the government is declaring that it no longer upholds a social contract
with teachers and other education workers. It is forcibly taking money
away from teachers and out of public education generally, and handing
it over to moneylenders and the monopolies under the anti-social hoax
of austerity and a provincial deficit. If the government is not held to
account, these attacks on the teachers' pension plan and degrading of
benefits through the elimination of indexing will be just the
beginning. Next will be a direct lowering of benefits (not just by
eliminating indexing), which is already suggested through the
fraudulent choices and to a certain extent was accomplished with the
two-year wage freeze. Also, the demand will arise that teachers
themselves must make the full contribution toward their pension fund
out of their wages, as the government gradually reduces its portion and
not just the indexed portion that it has unilaterally frozen for five
years.
On March 20, 2012, the day
after the Quebec Superior Court granted Aveos protection under the 
On February 4, 2013, the
Honourable Martin Castonguay, judge of the Quebec Superior Court
rendered his decision in the case brought by the Attorney General of
Quebec, with the Attorney General of Manitoba as an intervenor, against
Air Canada concerning the abandonment of Air Canada's legal
responsibilities to maintain heavy maintenance activities in Montreal
after the bankruptcy of Aveos.
As François Shalom
stated in the 