Proposed Early Retirement Incentive
This page will be updated as additional information becomes available. You can continue to refer to it for updates.
The temporary, voluntary Early Retirement Incentive program is proposed in Budget 2025 and, as such, is not yet available. Budget 2025 proposes to amend the Public Service Superannuation Act and the Income Tax Regulations to offer a voluntary Early Retirement Incentive program through the federal public service pension plan. Implementation would proceed by , or when legislation receives Royal Assent. The government intends to conclude the process within one year of implementation. More information will be provided subject to approval by Parliament of Budget 2025 and any required amendments to the Public Service Superannuation Act and Income Tax Regulations. Please bookmark this page as it will be updated with information as it becomes available.
Budget 2025 proposes to introduce a temporary, voluntary Early Retirement Incentive program through the federal public service pension plan. This incentive would help manage workforce reductions to the greatest extent possible through attrition and voluntary departures.
How this incentive would work
Eligible employees would be able to retire with an immediate pension based on years of service with no reduction for early retirement.
The annual pension amount would be calculated using the total years of pensionable service up to the early retirement date. Pensionable service refers to the period during which the employee contributed to the public service pension plan.
Who would be eligible for this incentive
This voluntary incentive program would be available to federal public service pension plan members who meet the following criteria, as well as additional parameters that will be set by the Treasury Board:
Group 1: Members who joined the public service pension plan on or before and who
- Are at least 50 years old
- Have at least 2 years of pensionable service
- Have at least 10 years of employment in the public service
Group 2: Members who joined the public service pension plan on or after and who
- Are at least 55 years old
- Have at least 2 years of pensionable service
- Have at least 10 years of employment in the public service
How a pension reduction for early retirement works
Normally, when an employee retires before meeting the age and service requirements for an immediate annuity, their pension is permanently reduced. This is called an annual allowance. The reduction is 5% for each year of early retirement.
For example, if they retire 5 years early, their pension will be reduced by 25%. However, under the Early Retirement Incentive program, this reduction would be waived for eligible employees.
Next steps
The proposals outlined on this page are subject to approval by Parliament of the Budget and the budget implementation legislation. If approved, all the necessary information would be communicated to employees, including any steps they would need to take if they are interested in a voluntary Early Retirement Incentive.
In the meantime, two pension tools are available to employees who wish to obtain a general estimate of their pension based on different scenarios.
Pension Portal
Employees can sign in to the Pension Portal to create personalized pension estimates.
Basic pension calculator
Employees who can’t access the Pension Portal can use the Basic pension calculator to get a general idea of their pension amount.
If employees experience difficulties using the pension calculation tools at their disposal, or have additional questions, they can contact the Government of Canada Pension Centre. Please note that the Pension Centre is experiencing increased call volume and wait times may be longer than usual.
For more information
Pension reduction and pension options
For additional information on how the pension reduction usually applies for early retirement, and on the existing pension options available, visit:
Workforce Adjustment
The Early Retirement Incentive program is not related to Work Force Adjustment, if you have questions about Work Force Adjustment, please speak with your manager or your departmental Human Resources. The Pension Centre does not have information about Work Force Adjustment. For more information about Workforce adjustment.