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Legislation designed as an incentive for the Quebec’s large number of baby boomers to keep working pass 55 to ease an impending labour shortage.
Quebec City (10 April 2008) – Quebec’s provincial government has introduced a Bill which will give people 55 and older the option of working part time and drawing up to 60 per cent of their pension. The legislation is designed as an incentive for the province’s large number of baby boomers to keep working to ease an impending labour shortage.
The Quebec government estimates by 2012, the province will have 700,000 unfilled jobs and has raised its immigration target by 10,000 to 55,000 newcomers a year to fill part of the gap. The phased-retirement plan would give an estimated 150,000 Quebecers, eligible for early retirement, the option of combining salary and pension incomes.
The legislation applies to private-sector employees as well as employees of provincial corporations, municipalities and universities. The government also plans to extend phased retirement to Quebec's 500,000 public employees.
Known as Bill 68, the legislation amends the province’s Supplemental Pension Plans Act (SPPA), allowing employees who are members of a defined pension plan to receive a retirement pension while continuing to work and accrue new pension benefits under the same plan. The bill brings Quebec’s pensions legislation in line with new changes to the federal Income Tax Act addressing phased retirement.
Phased retirement will now be funded by pension plans as opposed to the previous provision that required plan members to fund their phased retirement themselves by means of a pension reduction.
In addition, Bill 68 also amends the Act regarding the Quebec Pension Plan (QPP) by allowing retirees who continue to work to increase the benefits they will receive under the QPP. This means that 110,000 people now drawing QPP benefits but still working will be credited for their continuing work, rising by 0.5 per cent for each additional year workers contribute to the plan
Bill 68 does not cover about 60 per cent of Quebec’s workforce who are self-employed, have no company pension or have a small company pension that would not benefit from the legislation.