Questions persist over early retirement option for federal public servants

Some federal public servants received notices that they are eligible to retire early in hopes to reduce the size of the workforce. CTV’s Austin Lee reports.

With the 2025 federal budget receiving Royal Assent on Thursday, federal public servants can now apply for the Early Retirement Incentive Program.

The program is part of the federal government’s plan to reduce the size of the public service by 28,000 positions by 2029. Some 12,000 of those positions are expected to come through attrition and employees accepting early retirement incentives.

Roughly 68,000 early-retirement notices were sent out in December to workers who may be eligible to tap into the incentives, but it remains unclear how many have applied to date.

Stephane Turcotte is one of the thousands of public servants who received one of those notices.

He tells CTV News Ottawa that he was happy to hear of the retirement incentives.

“I was planning to retire anyways so, because there is a transition support measure and the severance pay, that’s going to help,” he said.

“It’s great. It’s going to be a change of course of my daily routine, but I’m looking forward to it.”

Concerns over Phoenix pay system

Not everyone, however, is all in on the plan.

The National Association of Federal Retirees (NAFR) is warning of potential pay disruptions and headaches for workers if the government is not careful with the roll out of its plan.

“The public servant who will retire, they won’t have the support of the union any more so, who will support them?” said NAFR chair of the board Gisèle Tassé-Goodman.

One of the primary concerns stems from the beleaguered Phoenix pay system, which is still dealing with a backlog of more than 215,000 transactions.

For potential retirees with existing issues on Phoenix, the fear is that their pension calculations could be impacted.

“The government will have to be extremely vigilant about this,” said Tassé-Goodman.

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“They have to protect these retirees because they were loyal to the employer. Some of them still have to pay their mortgage, they have family, they have hydro to pay and the older we get, there is an impact on health too.”

Tassé-Goodman adds there are also concerns that retirees who require support may have a harder time getting in touch with a federal worker at a call centre due to workforce adjustments and a reduction of public servants available to assist.

The Public Service Alliance of Canada (PSAC), the largest union representing public servants, argues the government has not clearly explained who is eligible for the early retirement incentives and how the program will be rolled out.

“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 PSAC’s National President Sharon DeSousa.

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“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.”

“Now that the legislation has passed, the government needs to be upfront about who qualifies, how decisions will be made and how this fits with existing pension waiver and voluntary departure processes. Workers deserve clear information so they can make informed choices.”

Some public sector workers who received a notice that their position could be impacted by workforce adjustments are breathing a sigh of relief given the number of their colleagues who are opting for the early retirement or voluntary departure options.

“I think a surprising amount of [people] volunteered so, thankfully a lot of us are rescinded status for the affected status so I think some of the tension has eased a little bit,” said Connie Monette.

“The workload is shifting around as would be expected.”

A spokesperson for the president of the Treasury Board said the Early Retirement Incentive places 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 to CTV News Ottawa.

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

Public sector workers have until July 24 to apply for the early retirement incentive program. If they are approved, they will have to retire by Jan. 20, 2027.

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

With files from CTV News Ottawa’s Josh Pringle

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