The Auditor General’s Report and the Public Service Pension Plan

June 03, 2010 The recent furore surrounding statements by the CD Institute that Canada's Pension Accounts reflected a large hidden deficit of nearly $58 billion is more disingenuous than we previously thought. While CAPE had shown in its rebuttal that the methodology employed by the Institute was inappropriate and flawed, and that the CD report was misleading at best, Canada's Auditor General ( Sheila Fraser, FCA) had extensively analyzed the statements of the pension accounts and reached a professional judgment that all is well. At the time of its analysis CAPE did not have the documentation of the OAG's findings. It is interesting to note that the Auditor General's report was transmitted about a month prior to the CD Howe Report. How the CD Howe Institute could have ignored the work of the Auditor General is simply incredulous. This only serves to discredit the Institute further, and exposes to what length's the Institute will go in attempting to engender public animosity towards government employees. Canadians can rest easy knowing that the Federal Public Service Pension Plans are not in a state of massive deficit, as the C.D. Howe Institute report would have them believe. The full statement of the Auditor General follows.
AUDITOR'S REPORT
To the Minister of Public Works and Government Services
and to the President of the Treasury Board
I have audited the statement of net assets and other accounts available for benefits, of accrued pension benefits, and of excess of actuarial value of net assets and other accounts available for benefits over accrued pension benefits of the Public Service Pension Plan as at March 31, 2009, and the statements of changes in net assets and other accounts available for benefits, changes in accrued pension benefits, and changes in excess of actuarial value of net assets and other accounts available for benefits over accrued pension benefits for the year then ended. These financial statements are the responsibility of the Plan's management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
In my opinion, these financial statements present fairly, in all material respects, the net assets and other accounts available for benefits, the accrued pension benefits, and the excess of actuarial value of net assets and other accounts available for benefits over accrued pension benefits of the Plan as at March 31, 2009, and the changes in net assets and other accounts available for benefits, changes in accrued pension benefits, and changes in excess of actuarial value of net assets and other accounts available for benefits over accrued pension benefits for the year then ended in accordance with Canadian generally accepted accounting principles.
Further, in my opinion, the transactions of the Plan that have come to my notice during my audit of the financial statements have, in all significant respects, been in accordance with the Public Service Superannuation Act and regulations, the Public Sector Pension Investment Board Act, regulations and the by-laws of the Public Sector Pension Investment Board.
Original signed by:
Sheila Fraser, FCA
Auditor General of Canada
Ottawa, Canada
November 30, 2009