Canada says budget will explain pension changes
* Budget will ensure steps to protect retirement income
* No cuts to current benefits
Feb 21 (Reuters) - The Canadian government will explain in its spring budget how it plans to reform a key pension program to keep up with an ageing population, Human Resources Minister Diane Finley said on Tuesday.
"Although there is no policy yet to announce, I can tell you that the upcoming budget will ensure steps to protect retirement income," Finley said in the prepared text of a speech she gave in Toronto.
"It will also ensure that there are no cuts to the current benefits for seniors," she said, providing no other details.
Finley dedicated much of her speech to describing the effects on the Canadian economy of demographic changes, as more baby boomers retire. The Old Age Security (OAS) retirement plan will become too costly to sustain unless changes are made, she said.
Possible changes to the OAS were first mentioned in January by Prime Minister Stephen Harper in a speech in Davos, sparking an outcry from seniors groups and the political opposition.
The government has not said how it plans to make the OAS more affordable, but one way would be to raise the retirement age. At present, OAS benefits kick in at age 65. Ottawa has stressed that any change is not imminent.
The OAS is a pillar of the country's pension system and is available to all seniors, although some benefits may be clawed back from high-income retirees.
Many Canadians are also entitled to benefits under the Canada Pension Plan, which receives contributions from workers and employers and which the government says is solidly funded for at least 75 years. CPP can be claimed from age 60.
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