The Nova Scotia government has introduced a bill that will allow employers to offer phased retirement to workers in an effort to retain experienced employees.
"The demographic challenges facing our labour market require innovative solutions," said Minister of Labour and Workforce Development Marilyn More. "We have an aging population and there is little doubt that businesses will have trouble finding replacements for retiring workers in the years ahead."
In 2007, the federal government made changes to income tax rules to allow workers to continue working, accumulate pension benefits and receive part of their pensions. However, workers had not been allowed to contribute to a pension plan while drawing pension benefits from that plan.
The proposed bill is a result of the Pension Review Panel recommendation to allow phased retirements, which would allow an employee who meets pension plan retirement criteria to continue working with their employer, and accrue additional benefits, while receiving pension benefits.
An employer would not be obligated to offer phased retirement to any or all staff. It would be a decision driven by business needs.
The amendments would apply to 167 defined benefit pension plans registered with the Department of Labour and Workforce Development for private-sector businesses and municipalities.
They would not apply to pension plans for public servants, teachers, MLAs and judges. Those plans are administered by the Nova Scotia Pension Agency, under separate legislation.
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