Thousands of federal employees weighing early retirement offer

Thousands of federal public servants are currently mulling over a pivotal career decision: whether to accept or decline their employer’s offer of an early retirement incentive.

The program allows federal employees to leave early without being penalized for cashing out their pension. Around 68,000 public servants have received letters informing them they’re eligible to apply.

Those who decide to accept the offer must apply by July 24.

It’s part of the government’s larger strategy to reduce the size of the federal public service. The government has committed $1.5 billion over five years to cover the cost of the incentive package.

Some experts are predicting significant uptake.

“We expect that there will be many employees that will be interested in applying for the early retirement incentive,” said Gisèle Tassé-Goodman, chair of the board for the National Association of Federal Retirees.

Under then prime minister Stephen Harper, thousands of federal public servants accepted targeted buyouts and early departure packages during an earlier effort to reduce a budget deficit.

Eligibility determined by age, years of service

Two groups of employees are eligible this time around, based on years of service, age and other criteria.

Employees who joined the public service pension plan on or before Dec. 31, 2012, and who are at least 50 years old could qualify. The second group includes employees who joined the pension plan on or after Jan. 1, 2013, and are at least 55.

Both groups require two years of pensionable service and at least 10 years of employment to be eligible. Applications opened in March, but not all applicants are guaranteed to be accepted.

Those taking the incentive will have to leave their positions within a prescribed time, and will face restrictions on returning on contract or in a consulting role.

Michael Lutes, COO and director of financial planning at Ecivda Financial Planning Boutique in Ottawa, said employees considering the incentive will have to do their homework.

“There is so much misinformation, there is so much nuance and there are many options available to people,” he said. “What this gives people the opportunity to do is to reassess, like take a step back … to decide and evaluate, what do I want for my life?”

Canada’s largest public service union has filed an official complaint asking the government to halt the incentive program.

The Public Service Alliance of Canada (PSAC) alleges the government is acting unfairly because it’s offering the incentive to individual members, thereby “circumventing” the broader workforce adjustment process.

Article source: https://www.cbc.ca/news/canada/ottawa/early-retirement-incentive-canada-federal-public-servant-9.7150297?cmp=rss