OTTAWA — Canadians under the age of 54 will be forced to wait longer to qualify for their Old Age Security pensions, Finance Minister Jim Flaherty announced Thursday.

The controversial shift means that starting in 2023, the age of eligibility for OAS benefits will gradually increase to 67 from 65.

With an 11-year "notification" of that change and a six-year phase-in that concludes in 2029, Flaherty said he has given Canadians "ample time to make adjustments to their retirement plans."

Flaherty also announced a new measure that will permit Canadians to delay claiming their OAS until later in life and, in return, be rewarded with higher benefits.

The purpose is twofold: Keep Canadians in the workforce longer to boost the economy and provide taxes to government, and limit the costs of the OAS system by ensuring there are fewer beneficiaries.

In an apparent move to blunt some of the public uproar, Flaherty announced that pension plans for public servants will be changed to require that the employees pay a larger contribution: 50 per cent.

As well, the pension plan for politicians, often criticized as an overly generous "gold-plated" scheme, will be adjusted, starting in the next Parliament, so they are "comparable" with contribution rates made by public servants.

However, there were no details on precisely how much of an increased share the MPs will bear in contributions, or whether they will lose two attractive elements of their scheme — qualifying for benefits after just six years in office, and claiming the money at age 55.

The controversial shift in OAS, the backbone of Canada's public pension system, was first telegraphed by Prime Minister Stephen Harper in January but details didn't come until Thursday.

Flaherty argued the changes are needed to ensure the long-term sustainability of the pension system. He told the Commons the OAS program was designed decades ago for a "much different demographic future."

In the 1970s, there were seven workers for every one person over the age of 65, he said. In 20 years there will be only two.

Similarly, in 1970, life expectancy was age 69 for men and 76 for women. Today, it is 79 for men and 83 for women.

"The result is that Canadians are living longer and healthier. There are fewer workers to take their place when they retire. Canada has changed. Old Age Security must change with it, to serve the purpose it was intended to serve," Flaherty said.

Opposition parties say he is creating a "false crisis" and immediately mounted fierce attacks. NDP leader Thomas Mulcair said Harper had violated a promise to not touch pensions.

"But today we learned that the word of the prime minister is worth nothing," said Mulcair. "It's totally inadmissible that in a country as rich as Canada we still have so many elderly people who are living in poverty. Mr. Harper prefers there would be more."

Interim Liberal leader Bob Rae said many Canadians, especially those in "physical industries," won't be able to work beyond 65 and would end up on provincial welfare rolls.