The VP of Benefits at Cowan, Teresa Norris-Lue, recently made me aware of proposed changes to the Canada Pension Plan, and I thought I would pass the information along to you in case you hadn’t yet seen it.

Starting in 2012, Canadians as young as 60 will be able to start drawing on their CPP benefits without leaving their jobs or having a reduction in work hours or earnings. Currently, Canadians who opt to retire early, at age 60, are required to either quit their jobs or reduce their earnings for at least two months.

There is one caveat. Under the current plan, if you retire at age 60, Canadians would collect CPP at a reduction of 30%. Under the new plan, the reduction for someone who retires at age 60 would go up to 36%.

At the same time, Canadians who retire after age 65 could also see a benefit. Currently, anyone who retires at age 70 would see their benefits boosted to 30%. Under the revised plan, that 30% would go up to 42%, and would be phased in starting in 2011.

For a link to an information paper on these proposed changes, click here.

The proposed changes to the CPP were announced at the end of May following discussions between Federal Finance Minister Jim Flaherty and his provincial and territorial counterparts. The pension debate continues with an article in The Globe and Mail called Canada’s Growing Pension Puzzle. An interesting read…