For non-government workers, if you choose to get Canada Pension Plan/Quebec Pension Plan (CPP/QPP) benefits before the retirement age of 65, your pension cheque takes a hit, as your benefits will be permanently scaled back.
On the other hand, many government workers have a provision in their pension plans known as a “bridge benefit” that allows them to claim their pension early, penalty-free. In most cases, the bridge benefit amount is roughly equal to the unreduced CPP/QPP benefit that they would otherwise receive at age 65.
If it seems unfair, that’s because it is. It’s also expensive: CFIB research shows this perk varies across public sector pension plans and amounts to about $8,000 in 2015.
The perk also seems to be a financial incentive for government workers to stop working: 81% of public sector workers retire before age 65, compared to 60% of workers in the private sector. Fewer than half of self-employed people retire before age 65.
The federal government and most provincial public sector pension plans—except Alberta, Saskatchewan, and Manitoba—offer the bridge benefit.
CFIB is calling for the end of bridge benefits in public sector pension plans.