Retirement incentives in defined-benefit pension plans offer employees significant inducements to retire early; a concern as Canada’s labour force ages and the first baby boomers move toward retirement, according to a Commentary released today by the C.D. Howe Institute.

In the commentary, economist Tammy Schirle of Wilfrid Laurier University demonstrates the large and compelling inducements to retire that can be found in four pension plans: Ontario Teachers’ Pension Plan, the Federal Public Service Pension Plan, the Ford Canada-Canadian Auto Workers pension plan and the pension plan covering Steelworkers at Stelco Canada.

What these plans have in common are clear incentives to enter retirement as soon as a person is eligible for unreduced retirement benefits. Special retirement provisions provide workers with clear incentives to enter retirement at set ages, and as early as 55, the author notes.