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Comparing Nest Eggs: How CPP Reform Affects Retirement Choices

Author

Listed:
  • Alexandre Laurin

    (C.D. Howe Institute)

  • Kevin Milligan

    (University of British Columbia)

  • Tammy Schirle

    (Wilfrid Laurier University)

Abstract

Important changes are now underway to Canada Pension Plan “adjustment factors” that will increase the penalty for those who retire before age 65, and will raise the amount of additional CPP benefits available for those who delay retirement beyond 65. The new pension adjustment factors have moved in the right direction, but still fall short of offering many Canadians who retire at different ages the same value for their CPP benefits. In particular, those affected by the GIS clawbacks continue to face substantial financial disincentives to working longer. The simplest remedy would be to sever the link between work after age 60 and lower future GIS payments by exempting the actuarial-adjustment portion of the CPP earned by delaying retirement past 60 from GIS clawbacks.

Suggested Citation

  • Alexandre Laurin & Kevin Milligan & Tammy Schirle, 2012. "Comparing Nest Eggs: How CPP Reform Affects Retirement Choices," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 352, May.
    • Handle: RePEc:cdh:commen:352
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    File URL: https://www.cdhowe.org/comparing-nest-eggs-how-cpp-reform-affects-retirement-choices
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    References listed on IDEAS

    as
    1. Kevin Milligan & Tammy Schirle, 2008. "Improving the Labour Market Incentives of Canada's Public Pensions," Canadian Public Policy, University of Toronto Press, vol. 34(3), pages 281-304, September.
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    Cited by:

    1. Finn Poschmann & Alexandre Laurin, 2014. "Who Loses Most? The Impact of Taxes and Transfers on Retirement Incomes," e-briefs 189, C.D. Howe Institute.
    2. Kevin Milligan & Tammy Schirle, 2018. "Retirement Incentives and Canada’s Social Security Programs," NBER Chapters, in: Social Security Programs and Retirement around the World: Reforms and Retirement Incentives, pages 79-107, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Pension Policy; Canada Pension Plan (CPP); early retirement; GIS clawback;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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