Changes will be made to the age of entitlement and benefit levels, though they won't take effect until after the next election in 2015.
In the meantime, MPs will start contributing more to their own pensions next year and by 2016, will pay half.
In advance of Thursday's budget, the Conservatives hinted they would take a hard line on MP pensions, after they raised the eligibility age for Old Age Security benefits to 67 from 65.
But the budget Thursday was thin on details, sparking criticism that politicians weren't ready to take a hit while asking Canadians to take one on the chin.
"The fact that they put their own bank accounts ahead of the country at the same time as they are asking others to sacrifice, it's really disappointing," said Gregory Thomas, the federal director of the Canadian Taxpayers Federation.
MPs can start collecting their pensions at age 55, enjoying benefits worth up to 75 per cent of their salary. Unlike other Canadians, they also have a pension plan immune from any shocks to the stock market and indexed to inflation.
And while private-sector plans see employees and employers equally split the cost of contributions, the government report on the administration of MP pensions says they contribute just $1 into their plan for every $5.80 contributed by taxpayers.
Government House leader Peter Van Loan was coy about the coming changes Friday, saying there had to be consultation before anything could happen.
"I'll let that process unfold," he said.
Opposition MPs were equally uneasy about getting into the details of what changes could or should be made.
"You know, in terms of compensation for MPs, we have always said that … these decisions should be made by an independent body, and we would absolutely go along with whatever their recommendations are," said New Democrat MP Robert Chisholm.
The Liberals said it's not just MPs pensions that need to be addressed.
In 1992, Prime Minister Brian Mulroney implemented a special allowance for prime ministers who had served four years or more to be collected once they turned 65 or when they ceased being an MP.
The annual allowance is equal to two-thirds of the prime minister's salary, so for Prime Minister Stephen Harper's case, that will work out to around $104,000 a year.
"Mr. Harper proposes raising the age of retirement to 67," said Liberal MP Justin Trudeau.
"We propose he does the same thing for his special pension."
Author: Canadian Press