Frequently asked questions

What happens if my job is “transferred” to an employer that does not have a pension plan?

If your new employer does not have a pension plan, the transfer is not covered by the divestment provisions of the PBA. In this case, you would be considered to have terminated from the OPSEU Pension Plan when you stop working for your OPTrust employer. You would then be entitled to the normal termination or retirement options under the Plan. Please refer to page 6 for more information on termination options.

If I am “divested,” will I still be able to qualify for Factor 80, Factor 90 or 60/20?

You may still qualify for an early-unreduced pension from OPTrust that was available when you terminated your OPTrust membership or is subsequently extended to divested members. Divested members leave their service in the OPSEU Pension Plan for the pre-divestment period, and are considered to be “special deferred pensioners.” They also become active members of the new plan on the date of the divestment.

Under the Pension Benefits Act, the OPSEU Pension Plan must recognize employment with the new employer for determining your eligibility to benefits, while the new plan must recognize membership in the former plan when determining a person’s eligibility for pension benefits. So if you are divested, you can still qualify for OPTrust’s early unreduced pension provisions, depending on whether you satisfy these requirements when you retire. However, you must terminate employment from your new employer to receive a pension. Once again, the amount of your OPTrust pension will be calculated based on your actual credit and average annual salary in the OPSEU Pension Plan up to the date of divestment.

You may also qualify for a pension under your new plan’s early retirement options, depending on the provisions of that plan. The amount of your pension in the new plan will be based on your accrued credit and salary with the new employer. Please contact both plans before you decide to retire.

We suggest that you obtain pension estimates from both Plan administrators at least three or more months in advance of your expected retirement. In addition, each plan should be informed of your intention to retire three months before the actual retirement date. This will ensure that both plan administrators exchange all relevant information in a timely manner.

After a divestment, will my OPTrust pension be protected against inflation?

Yes. Your future pension from the OPSEU Pension Plan would be based on the average of your best five consecutive years’ salary prior to the date of the divestment. When OPTrust calculates your pension on your retirement, it will be adjusted to match increases in the Consumer Price Index since your divestment. See example.

That means the buying power of your deferred OPTrust pension will keep pace with inflation. Under the Plan, the maximum adjustment is 8% per year. If inflation is higher than 8% in any year, the remainder of the adjustment is carried forward to future years. Once you start to collect a pension from OPTrust, your benefits will continue to increase with inflation throughout your lifetime.

Will I still qualify for post-retirement health benefits if I am divested?

The Government of Ontario provides post-retirement health and dental benefits. Under the current rules, you will be entitled to those benefits if you have:

• a minimum of 10 years of credit in the Plan,

  OR

• 10 years of continuous service with credit in the Plan for at least part of each of those years.

If the divestment provisions apply to me, can I retire with an OPTrust pension and still work for the new employer?

No. If you accept an offer of employment from the new employer and join their pension plan in conjunction with the divestment under the PBA, your employment is deemed not to have terminated for pension purposes. As a result, you would not be eligible for an OPTrust pension. You will only become eligible for an OPTrust pension when you terminate from your new employer or the new pension plan.

What happens if I am part of a divestment but am not eligible to join the new employer’s pension plan?

If, following the sale or transfer of your employer’s business or assets, you are not eligible to join the new employer’s pension plan, the divestment provisions will not apply and you will be considered to be terminated for pension purposes. You would be entitled to OPTrust’s normal termination options. However, if there is a waiting period before enrolling in your new pension plan, the divestment provisions will apply to you. Your membership in the OPSEU Pension Plan must be counted towards satisfying the waiting period.

I want to buyback service in my new plan to get early retirement at both pension plans. Is this possible?

You should contact OPTrust before purchasing past service credits. Service purchased in the new plan for employment periods prior to the divestment date is not counted for early retirement eligibility in the OPSEU Pension Plan. Ask your new employer or pension plan about their buyback rules.

Will I continue to receive an Annual Pension Statement from OPTrust?

Yes. As a divested member, you will begin receiving an Annual Pension Statement (APS), which is specifically designed for all special deferred (divested) pensioners. You will continue to receive this statement each year until you actually retire and begin to receive your OPTrust pension. Please ensure that you notify us if you move so that we can send your APS and other important communications to your new home mailing address.

What if I have any further questions about how the divestment will impact my pension?

If you have any other questions that were not addressed in this booklet, please contact our offices by phone, fax or e-mail listed on the inside front cover. Our staff would be more than pleased to organize an information session at your office during a convenient time, if there is a significant number of people interested in a presentation. Please contact OPTrust for more details.