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Cut disincentives for older workers remaining in labour force--C.D. Howe.

TORONTO -- Major changes are required to the Canada and Quebec Pension Plans to eliminate fiscal disincentives to work for older workers or else the plans could face a significant shortfall in skilled workers in the coming decades says an article published by the C.D. Howe Institute.

In Follow Quebec's Lead: Removing Disincentives To Work After 60 by Reforming the CPP/QPP, Yvan Guillemette, a C.D. Howe Institute policy analyst, says the federal government should follow Quebec's lead in implementing changes to the CPP as those proposed for the QPP.

In particular, he supports the proposals

* to allow individuals to take their QPP retirement pension at age 60, even if they continue to work;

* to simplify the formula used to determine an individual's pension entitlement which would provide an additional incentive to older workers to continue to work since their maximum pension would not be lowered as a result of working in lower paid jobs in their older years, as it is now;

* allow contributions paid by older workers, who return to work after receiving a pension, to increase their pension up to the maximum amount payable by adding to their total insured earnings.

Finally, Guillmette believes a proposal to increase the actuarial adjustment factor used to increase the retirement pensions of those who retire after 65 years of age would provide "a clear incentive to delay retirement."

At the same time Canadian governments "should undertake a sweeping review of old age security programs to remove the remaining work disincentives" for older workers.
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Title Annotation:Income Security
Publication:Community Action
Article Type:Brief Article
Geographic Code:1CANA
Date:Jun 14, 2004
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