The federal government is raising the eligibility for Old Age Security (OAS) from age 65 to 67, according to Finance Minister Jim Flaherty when announcing the federal budget on March 29.
The government said it would follow in the footsteps of countries such as Australia, France, Germany and the United States by raising the age of OAS eligibility.
Canadians currently under age 54 will be affected by the change as it will be gradually phased in starting in 2023, with full implementation by 2029. The 11-year “notification" of that change and six-year phase-in gives Canadians "ample time to make adjustments to their retirement plans," said Flaherty.
"It's a very reasonable transition period," said Albert Baker, partner at Deloitte. "All countries are living through the baby boomer effect and so the cost of that program is going to triple, so countries around the world are taking the necessary steps."
The budget also stipulates the pensions of government workers will be brought in line with those in the private sector. The contribution rate for public sector workers will be 50 per cent, up from the current 36 per cent, said Flaherty.
Members of Parliament will also see their pension plan contribution rates increasing.
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