I was alerted on FB to this article in the Globe and Mail on changes to the Canada Pension Plan that were implemented as part of the 2009 Tory budget bill.
Previously if you elected to collect your CPP retirment benefits at age 60, your pension would have been reduced by 30%. Effective in 2016, these benefits will be reduced by 36%. These changes are gradually being phased in over the next 4-5 years.
So, if you were born in 1956 or later, you're going to take a bigger "hit" if you decide to retire earlier.
On the other hand, if you elect not to collect your CPP until after 65, your benefits will increase by 8.4% for each year you delay instead of the current 6%. So you'd get a 142% pension at age 70 instead of the current 130% pension.
You can find more detailed info in a Service Canada .pdf file at the link below:
This change was sort of "snuck in" to the 2009 budget implementation bill. What the Harper government is in the habit of doing lately, is throwing everything including the kitchen sink into the budget, and since it's a matter of confidence, defeating the bill means bringing the government down. Since the opposition parties are in terror about being blamed for an early election, Harper gets away with it all.
From what I can see, this is a sort of "back door" way to raise the retirement age. The Tories are discouraging workers from retiring early, and encouraging them to hang in at work longer.
It'll have repercussions for younger workers in that older workers will hang in longer then they really want to, and it'll be longer till certain jobs open up for the young.
Alot of workers from the manufacturing sector in say their late 50's or early 60's, burn through their severance pay, then their EI benefits, can't find work and so just take an early pension. It's not exactly easy for older workers to get hired.
As these changes are phased in, these workers are going to take a hit.
Also, many employer-based pension plans reduce the amount of pension benefits you receive by the amount you're getting from CPP. So, if you're getting less from CPP, more money is going to be drawn out of the employer-based pension plans. Also folks will burn through their RRSP savings earlier.
We learn of this in the context of Flaherty and company sabotaging plans to improve the CPP supported by labour, senior's organizations and most provincial finance ministers.
So, the key to changing this and so many other things is for the opposition parties to grow a spine so that we can get rid of this awful government.