Here’s what you need to know about the federal government’s early retirement package

Federal government office buildings are seen in this undated photo. (CTV News Ottawa)

Tens of thousands of federal public servants can now apply for an early retirement package, as part of the federal government’s plan to trim the size of the public service by 2029.

The Treasury Board of Canada Secretariat says the Early Retirement Incentive program is now open, and eligible employees can apply until July 24.

• Questions persist over early retirement option for federal public servants

CTVNewsOttawa.ca looks at what you need to know about the Early Retirement Incentive program for public servants.

Why is the government offering early retirement packages?

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.

A spokesperson for Treasury Board President Shafqat Ali told CTV News Ottawa last week that the workforce adjustments will be managed “to the greatest extent possible” through attrition and early departures.

The budget amended the Public Service Superannuation Act and Income Tax Regulations to offer a voluntary Early Retirement Incentive program through the Public Service Pension Plan.

What is the Early Retirement Incentive program?

The Early Retirement Incentive program will allow public servants to retire early with no reduction to their pension.

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.”

Who is eligible?

In December, approximately 68,000 federal public servants received notices saying they could be eligible for early retirement.

The federal government says to be eligible for early retirement, you must meet the following parameters on the day you leave the public service.

Group 1: You joined the public service pension plan on or before December 31, 2012, and

• 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: You joined the public service pension plan on or after January 1, 2013, and

• 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

The federal government says employees must meet the eligibility parameters during the 300-day period from when the program begins.

Can you accept early retirement and other workforce adjustment benefits?

The quick answer is no.

According to the Treasury Board of Canada, the Early Retirement Incentive is not available to employees who are entitled to a separation benefit under the workforce adjustment or employee transition provisions.

“This means, for example, that employees who have received an opting letter under workforce adjustment continue to be eligible to apply for the Early Retirement Incentive until such time as they have chosen or are deemed to have chosen an option under the terms of their workforce adjustment provisions or, in the case of executives, a career transition or similar measure,” the government said.

Who will get an early retirement package?

According to the Treasury Board of Canada Secretariat, the deputy ministers will determine whether an early retirement package is approved.

“Meeting the eligibility parameters does not guarantee you will be approved for the Early Retirement Incentive,” the government says.

The deputy ministers will review applications to confirm whether the following criteria are met:

• The organization needs to reduce its workforce
• Services to Canadians will be maintained
• Current and future operational or business needs will continue to be met

“If your application is accepted by your Deputy Head, it will be submitted to the Pension Centre for a final validation to ensure that you meet the age and service eligibility parameters to retire under the Early Retirement Incentive program,” the Treasury Board of Canada Secretariat said.

What are the deadlines?

Eligible employees must apply for the Early Retirement Incentive program by July 24, 2026.

The Early Retirement Incentive program runs for 300 days, meaning employees who are approved for an early retirement package must depart the public service by Jan. 20, 2027.

The unions response

Federal unions have raised concerns about the rollout of the early retirement program.

“Workers are being invited to apply for a life-changing program without knowing if they’re even eligible, while final decisions are left to deputy heads behind closed doors. That lack of transparency leaves people guessing about their futures,” said Sharon DeSousa, president of the Public Service Alliance of Canada.

“There’s already a clear, negotiated process under workforce adjustment that workers can rely on, including access to a pension waiver and other supports. But now, workers are being asked to consider a new option without knowing if it applies to them or how it compares. That’s creating confusion at a time when people need clarity.”

The Canadian Association of Professional Employees is accusing the government of “raiding the pension surplus of public service employees to pay for its policies.”

“That money is part of the compensation and deferred salary our members have set aside to provide a safe, secure retirement. Current national and global financial insecurity underscores the importance of that more than ever,” president Nathan Prier said in a statement.

“In the last two years the government has looted $2.8 billion from public servants’ pension fund – and is now using our retirement fund to offset the costs of its ideological job and program cuts. The government should be paying for its own misguided policies, not asking public servants to do it for them. This is theft and must end now. There should be no use of workers’ retirement savings without full and meaningful discussions with the unions who represent them."

Treasury Board president

A spokesperson for Treasury Board President Shafqat Ali told CTV News Ottawa said on Tuesday that, “The Early Retirement Incentive is proceeding with an emphasis on voluntary, structured options to retire early with clarity and predictability.”

“Through this initiative, approximately 68,000 public servants received notifications that they may be eligible to retire early with an immediate pension based on years of service, with no penalty for leaving early, subject to criteria set by the Treasury Board,” Mohammad Kamal said in an email.

“This initiative recognizes the years of service of public servants while providing greater clarity and predictability.”

With files from CTV News Ottawa’s Austin Lee

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