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Legislation will allow an employee who meets pension plan retirement criteria to continue working, and accrue additional benefits, while receiving pension benefits.
Halifax (23 October 2009) – The Nova Scotia government yesterday introduced legislation which will allow employers to better able to retain key staff who are eligible to retire yet want to keep working, and provide new opportunities for workers approaching retirement.
In January, a Pension Review Panel established by the former government recommended permitting 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.
"The demographic challenges facing our labour market require innovative solutions," said Labour and Workforce Development Minister 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. Workers had not been allowed to contribute to a pension plan while drawing pension benefits from that plan.
As well, there is no mandatory retirement age for most Nova Scotian workers as of July 1.
Upon reaching retirement age, some workers may want to stay employed. For example, workers whose careers began late in life or were interrupted, may want to continue working longer to maximize pension plan contributions.
Many employers would also like to offer older workers a reason to remain with the company longer because they know the business, clients, products and services.
Under the proposed legislation, 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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