PRESS RELEASE

19 November 1999

Attention: News Editors/Labour Reporters

Canadian Armed Forces Retirees File Court Action Over Pension Grab

The Armed Forces Pensioners'/Annuitants' Association Inc. of Canada (AFP/AAC) will be launching a new court action to challenge Bill C-78, the recent legislation which authorises the federal government to unilaterally transfer the $30 billion surplus out of government employee pension plans. The AFP/AAC is also involved in ongoing Federal Court actions which attack the government's use of an accounting device to remove approximately $11 billion from the pension plans before Bill C-78 came into effect. "We served our country honourably, in uniform in war time and in peace, and the federal government has rewarded us by stealing our retirement savings." says AFP/AAC National Chairman Ed Halayko.

The AFP/AAC represents over 25,000 former and retired members of the Canadian Armed Forces. The lawyers for the AFP/AAC, Caroline Engelmann Gottheil, plan to file the action challenging Bill C-78 in the Ontario Superior Court within a week and expect that the military retirees will be joined by an association representing RCMP officers. The two groups will argue that the surplus grab is unconstitutional and that the government has unlawfully "expropriated" the pension surplus without compensating the plan contributors. Similar actions have already been filed in the Ontario Court by the Public Service Alliance of Canada and the Professional Institute of the Public Service.

Mr. Halayko hopes to work with the unions to defeat Bill C-78 but notes that there are differences between the union law suits and that of the AFP/AAC - RCMP Association. For example, military employees have been disproportionately affected by the surplus grab. There are less than 160,000 members of the Canadian Forces Plan compared to about 625,000 members of the federal public service superannuation plans overall. However, of the $30 billion that will be taken from the superannuation accounts, almost $13 billion comes from the Canadian Forces Superannuation Account. As well, members of the military have been historically disadvantaged, in terms of both their low pay and annuities and their rights to organise. The average military superannuation is only about $16,000 per year and most military annuitants or their survivors receive less than $12,000 per year!

Mr. Halayko is also concerned about the uneven playing field when it comes to pension disputes between the federal government and its employees or pensioners. The AFP/AAC has been involved in Federal Court proceedings which challenge the government's use of accounting practices to remove over $11 billion from the pension plans. Rather than fighting the cases in the Court, the government dealt with the case by changing the law. As Mr. Halayko puts it, "If the government doesn't like the rules, it just passes a law to change them". "Bill C-78 is particularly hypocritical coming from the Liberal government which claimed to be supportive of the Canadian Forces Superannuates' rights when it was in opposition."

According to Fiona Campbell of Caroline Engelmann Gottheil, who is representing the Canadian Armed Forces Annuitants in their Court actions, pension surplus issues are dealt with very differently in the private sector. For example, pension plans that are registered under the federal pension legislation are not allowed to withdraw surplus without the consent of at least two-thirds of pension plan members. Mr. Halayko says that the federal government is creating two classes of citizens when it comes to pension rights and apparently, those who work for the federal government have no rights at all.

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