How much will my buyback cost?

Once OPTrust receives your complete application and confirms your eligibility, we will calculate the cost of your buyback and send you an Agreement to Purchase Credit form. If you apply online, you will receive your cost quote immediately. The agreement sets out the cost of your purchase and your payment options. It also shows how much your estimated pension will increase and when you will be eligible to retire with an unreduced pension, if you complete your buyback.

Your cost for the buyback depends on:

• the type of service you are buying back
• the amount of credit you are buying back
• the contribution rates in effect during the period of service you are buying back, and
• your salary rate at the time OPTrust receives your complete application.

In some cases, your employer will make a matching payment. This applies to:

i) prior service with an employer who contributed to the OPSEU Pension Plan, the PSPP or its predecessor, and

ii) unpaid LOAs for pregnancy, parental, adoption, family medical or illness leaves including WSIB.

For other cases, the member pays the entire cost of the buyback. This applies to purchases of service with a non-OPS employer, special and educational leaves.

Service with an employer who contributed to the OPSEU Pension Plan, the PSPP or its predecessor

NON-CONTRIBUTORY SERVICE

Your cost for buying prior non-contributory service – including periods of contract/unclassified employment – is based on this formula:

One part of this formula is the member contribution rate in effect during the period of service you are buying back. For some periods, the Plan’s normal member contribution rate applies: member contribution rates were reduced during the periods April 1, 1994 to March 31, 1997 and December 1, 1999 to December 31, 2004. For these periods, the buyback cost would be lower as well.

OPSEU Pension Plan contributions are integrated with the Canada Pension Plan. Starting in 2005, the normal contribution rate equals:

The normal member contribution rate applies to service between January 1, 1990 and March 31, 1994; between April 1, 1997 and November 30, 1999; and the reduced contribution rates that were in effect during other periods up to December 31, 2004.

*YBE means Year’s Basic Exemption and is set by CPP each year.

CONTRIBUTORY SERVICE

If you previously received a refund or transferred your entitlement out of the Plan (or the PSPP or its predecessor) and want to buy back this service, the cost of your buyback will equal the higher of:

• the amount based on the formula above, and
• the gross amount paid to you from the Plan (or the PSPP or its predecessor), plus interest.

Unpaid leaves of absence

For family medical, illness, WSIB, pregnancy, parental and adoption leaves, your buyback cost is calculated using the same formula as service with an employer who contributed to the OPSEU Pension Plan (see above).

The employer pays matching contributions for these leaves. The employer does not make a matching payment for special and educational leaves. Depending on the dates of the service you are buying, your cost will be calculated using either:

• two times the member contribution rate in effect for that period,

  or

• the member contribution rate plus the employer contribution rate.

Service with another Canadian registered pension plan

The buyback cost for service with another pension plan is calculated differently. It is based on the projected – or “actuarial” – value of the additional pension you will receive from OPTrust when you retire. If your purchase will allow you to retire sooner, this will be reflected in your cost, too. When you buy back this type of credit, your employer does not make any matching contributions. The buyback cost goes up with increases in your age, years of membership, earnings, and early retirement eligibility. You can get an estimate of your non-OPS buyback cost online at www.optrust.com.

BUYBACK COST EXAMPLES

The following table shows examples of the member’s cost for two common types of buyback:

• Non-contributory service under the OPSEU Pension Plan, the PSPP or its predecessor– including contract/unclassified employment, and
• Unpaid pregnancy, parental or adoption, family medical leaves and leaves due to illness.

The cost shown is for one year of credit, based on the Plan’s normal contribution rate. The buyback cost would be less for periods when a lower contribution was in effect – including periods between April 1, 1994 and March 31, 1997 and between December 1, 1999 and December 31, 2004.