2010 highlights

• OPTrust implemented the first of three annual 1% contribution rate increases as part of our deficit management strategy.
• The Plan’s actuarial assumptions were strengthened to better reflect its current situation and factors that may affect its future liabilities.
• After a second year of strong investment results, the Plan had deferred investment gains of $388 million due to actuarial smoothing, compared to deferred losses of $294 million at the end of 2009.

As a defined benefit pension plan, the OPSEU Pension Plan makes a promise to its members that they will receive a secure, lifetime pension in their retirement years. Delivering on that promise, particularly with respect to inflation protection, requires continual oversight of the Plan’s funding requirements by OPTrust’s Trustees and staff members, supported by the sponsors.

Shared risks and rewards

Under OPTrust's joint sponsorship governance model, our membership and the Government of Ontario have an equal share in the Plan's funding gains. They also share the responsibility for making up any funding shortfalls.

In their role as the Plan's sponsors, OPSEU (on behalf of the membership) and the Government of Ontario are responsible for deciding how to allocate any funding gains identified in a filed valuation.

Each sponsor may use its share of gains to reduce contribution rates, enhance benefits, eliminate any outstanding deficit and/or add to the Plan's rate stabilization reserves for members and employers.

If the valuation identifies a net funding loss, the shortfall must be paid down over a 15-year amortization period by increasing member and employer contribution rates. However, if stabilization reserves are available, the sponsors may use them to offset part or all of the required contribution increase. If the funding loss cannot be met through stabilization reserves or increased contributions, the sponsors have the option of reducing future benefits.