Tax, pension rules make phased retirement difficult

The driving force behind phased-retirement programs is a desire to defer the date of full retirement, not to encourage early retirement
By Sheryl Smolkin
|Canadian HR Reporter|Last Updated: 12/11/2003


s a large number of baby boomers approach retirement, employee retention is the primary motivator behind a renewed interest in phased retirement.

In the mid-1990s, a number of Canadian employers, primarily in the public sector, used phased retirement programs to encourage workers to retire early. Phased retirement programs are any arrangements that enable employees approaching retirement age to reduce their work hours or job responsibilities in order to gradually ease into full retirement. Since the primary goal in the ’90s was payroll and workforce reduction, when an employee opted-in to a phased retirement plan, there was generally no turning back.