An Act to amend the Supplemental Pension Plans Act, the Act respecting the Québec Pension Plan and other legislative provisions[1], which received official sanction on June 20, 2008, allows supplemental pension plans to offer participating workers the option of taking phased retirement.

Thus, where the supplemental pension plan permits, an employee who is under 65 years of age can make an agreement with his employer to receive phased retirement benefits.

Who can make such a request?

  • an employee who is at least 60 years old;
  • an employee who is at least 55 years old, if he is entitled to an early retirement pension without any reduction by reason of payment having begun before the normal retirement age.

The employee will receive a phased retirement benefit under such terms as are established by agreement with the employer. The maximum annual amount of the benefit corresponds, in principle, to 60% of the annual amount of the retirement benefit to which the employee is entitled when he applies for phased retirement.

Unless it is more advantageous to the employee, the benefit paid during the phased retirement period will not be taken into account when calculating the benefits paid to the employee in relation to recognized services that do not relate to that period. Moreover, an employee who continues to pay into the pension plan during phased retirement will be entitled to an extra pension.

Supplemental pension plans are not required to allow phased retirement. Furthermore, to take advantage of phased retirement, the Supplemental Pension Plans Act[2] does not require the employee to work fewer hours.