The Government proposes to adjust the Public Service Pension Plan so that public service employee contributions equal, over time, those of the employer (50/50). Comparable changes to the contribution rates will be made to the pension plans for the Canadian Forces, the Royal Canadian Mounted Police and Parliamentarians. In addition, it is proposed that, for those employees who join the federal public service starting in 2013, the normal age of retirement will be raised from 60 to 65. Adjustments to the pension plan of Parliamentarians will take effect in the next Parliament.
About the Initiative
The public service pension plan, which is governed by the Public Service Superannuation Act
, is a defined benefit pension plan in which employees of the federal public service may be entitled to participate. Pension plans are designed to provide employees with a retirement income during their lifetime. In the event of death, the plans also provide an income for survivors and eligible children.
Progress to Date
The Pension Reform Act
amended the Members of Parliament Retiring Allowances Act
so that MPs will pay 50% of the pension plan’s cost. The age at which MPs can retire with an unreduced pension will also rise from 55 to 65, as of January 1, 2016.
Following Royal Assent of the Jobs and Growth Act, 2012
, public sector pension reforms came into effect on January 1, 2013. These changes will bring contribution rates for public service pension plan members to a 50/50 cost-sharing model by 2017, resulting in substantial savings for Canadian taxpayers. Also, as of January 1, 2013 the age at which newly hired public service pension plan members will begin collecting their pensions will increase to 65. Contribution rates for members of the Canadian Forces and the Royal Canadian Mounted Police pension plans will be aligned with the public service pension plan.
Over the next five years, these measures, along with changes made to the Members of Parliament pension plan, will save taxpayers $2.6 billion.
Find Out More
For more information, please visit the Treasury Board Secretariat Web site.