Federal public servants can now apply for early retirement package

A federal office tower in Ottawa. Aug. 2, 2021. (Jackie Perez / CTV News Ottawa)

Federal public servants can now apply for an early retirement package, as the federal government looks to trim the size of the public service by 2029.

The Canada Strong Budget 2025, released in November, outlined a plan to cut the size of the federal public service by 28,000 positions by 2029, including 12,000 employees and 350 executive positions cut through attrition and early retirement packages.

In December, approximately 68,000 early-retirement notices were issued to federal public servants, saying they could be eligible for early retirement.

On Friday, the federal government announced applications are now being accepted for the Early Retirement Incentive Program, after the budget received Royal Assent on Thursday.

“Under this program, eligible employees can apply to retire with an immediate pension based on years of service, with no reduction for retiring early,” the government said.

“Eligible employees will receive a letter with instructions on how to apply.”

Federal public servants have until July 24 to apply. Any public servant approved for the early retirement incentive package must retire by Jan. 20, 2027.

The president of the Treasury Board says workforce reductions will be “managed to the greatest extent possible through attrition and voluntary departures.”

“The Early Retirement Incentive is proceeding with an emphasis on voluntary, structured options to retire early with clarity and predictability,” Shafqat Ali said in a statement.

Under the Public Service Pension Plan, when an employee retires before meeting the age and service requirements for an immediate annuity, their pension is permanently reduced by five per cent for each year they retire early. The federal government says the Early Retirement Incentive Program would allow eligible employees to retire “with no reduction for retiring early.”

“Under the Early Retirement Incentive program, eligible employees can apply to retire based on age and years of service with no reduction for early retirement,” the government’s website said. “The annual pension amount will be calculated using the total years of pensionable service up to the early retirement date.”

Earlier this month, the Public Service Alliance of Canada filed a policy grievance over the early retirement packages, saying the plan circumvents “key obligations under our collective agreements.”

The union says while it does not oppose early retirement options for federal public servants, any policy to prevent involuntary layoffs “must be negotiated, lawful, and protect workers’ rights.”

Data provided by the Treasury Board of Canada Secretariat, federal departments and unions show more than 26,000 public servants have received notices their jobs could be at risk as part of the Comprehensive Expenditure Review.

The government says employees would need to meet the following eligibility criteria to be eligible:

Group 1: Members who joined the public service pension plan on or before Dec. 31, 2012, and who:

• Are at least 50 years old
• Have at least two 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 Jan. 1, 2013, and who:

• Are at least 55 years old
• Have at least two years of pensionable service
• Have at least 10 years of employment in the public service

According to the government’s website, meeting the eligibility parameters for the Early Retirement Incentive “does not guarantee you will be approved.”

“Your Deputy Head (or equivalent) will review your application to confirm whether the following Treasury Board-approved criteria have been met – the organization needs to reduce its workforce, services to Canadians will be maintained, and current and future operational or business needs will continue to be met.”

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