The federal government has introduced Bill C-28, the Budget and Economic Statement Implementation Act, which includes the allowance of phased-retirement options for pension plans.
The bill received its first reading in the House of Commons today and the measures in the bill were included in a Notice of Ways and Means Motion introduced last week.
According to Watson Wyatt, one part of the Act proposes changes to subsection 8503 of the Income Tax Regulation(ITR), which sets out rules relating to phased retirement and older-worker retention programs. The amended rules will allow defined benefit(DB)registered pension plans(RPPs)to provide for qualifying employees to receive bridging benefits on a stand-alone basis or receive up to 60% of their accrued pension while they continue to accrue additional benefits.
The amendments will also allow an employee who has reached age 60 or who has reached age 55 and is entitled to an unreduced pension to receive pension benefits from a DB RPP, subject to certain restrictions.
The measures in this Act were not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007.
To read the bill on the federal government’s website, click here.
To comment on this story, email craig.sebastiano@rci.rogers.com.
An earlier version of this story incorrectly stated that the phased retirement legislation passed. Benefits Canada regrets the error.