PACP Committee News Release
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Standing Committee on Public Accounts |
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Comité permanent des comptes publics |
For immediate release
NEWS RELEASE
FEDERAL GOVERNMENT NEEDS TO CONDUCT SUSTAINABILITY ASSESSMENTS OF PUBLIC SECTOR PENSION PLANS AND TO IMPLEMENT A FUNDING POLICY
Ottawa, November 19, 2014 -
In the context of an aging population and challenging economic conditions, the federal government needs to formalize its framework for conducting systematic sustainability assessments for the public service pension plans, and to implement a funding policy for the plans, according to the Standing Committee on Public Accounts’ report presented today in the House of Commons by Committee Chair David Christopherson.
As the plans’ sponsor, the federal government is responsible for ensuring that sufficient funds are available to finance the pension plan benefits provided to members of the federal public service, the Canadian Forces and the Royal Canadian Mounted Police (RCMP). Because the plans have a statutory basis, any actuarial deficits or liabilities have direct budgetary implications.
In its Spring 2014 Report, the Office of the Auditor General (OAG) released a performance audit that examined whether the Treasury Board of Canada Secretariat, the Department of National Defence, the RCMP and the Department of Finance carried out selected aspects of their governance and legislated responsibilities with regard to the three major public sector pension plans. The OAG found that they used relevant information and analyses to carry out their responsibilities, but the governance framework needs to be strengthened. The federal government had not delegated responsibility for conducting systematic sustainability assessments nor had it implemented a funding policy to ensure that the plans can meet future pension obligations.
In order to ensure that the federal government makes progress in the area of public sector pension plan governance, the Committee recommends that the plans’ sponsor, through its administrative and supporting entities, formalize its framework for conducting systematic sustainability assessments for the three major public sector pension plans, finalize and implement a funding policy, finalize a proposal for a consolidated and simplified report, and complete its assessment of the funding of pre-2000 pension obligations.
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