Common pension terms

Average Annual Salary — your average salary rate for your highest consecutive five years of salary during your membership in the OPSEU Pension Plan. For part-time employees, the average annual salary reflects the “full-time equivalent” salary rate, not your actual earnings.

Buyback – the purchase of credit in the Plan for an eligible period of past service.

Commuted value – the amount of an immediate lump-sum payment (in today’s dollars), estimated to be equal in value to a future series of pension payments.

CPP integration – a reduction to your OPTrust pension at age 65. CPP integration reflects the lower contributions you pay to the OPSEU Pension Plan for the portion of your earnings – between the Year’s Basic Exemption and the Year’s Maximum Pensionable Earnings – for which you also contribute to the Canada Pension Plan.

Deferred pension – a specified pension determined at the time of termination from employment, which is payable at normal retirement age. A deferred pension may be paid as early as age 55 with an age reduction penalty.

Defined benefit plan – a plan that defines the pension to be provided (based on credit and average salary) but not the total contributions.

Divestment – the transfer of an operation and its employees from the Ontario Public Service or one of its agencies to other governments, agencies or the private sector.

Eligible child – under the OPSEU Pension Plan, a child is eligible to receive survivor benefits if: the child is under the age of 18, or if over 18, the child is in continuous full-time attendance at a secondary school or, immediately following secondary school, is attending a post-secondary institution to a maximum of five years.

Eligible spouse – spouse is defined as one of two individuals, whether of the same or opposite sex, who:

• are married to each other

  OR

• are living together in a conjugal, common-law or same-sex relationship
1. for at least three years
   

   OR

2. have a relationship of some permanence and are the natural or adoptive parents of a child.

Factor 80 – a temporary early retirement option allowing members whose age plus credit total exactly 80 years on or before March 31, 2005, to retire with an unreduced OPTrust pension.

Factor 90 – a permanent early retirement option allowing members whose age plus credit total at least 90 years to retire with an unreduced OPTrust pension.

Inflation protection – the process where the value of your pension is adjusted (increased) to the cost-of-living index, to offset the effects of inflation. The OPSEU Pension Plan is indexed to the Consumer Price Index (CPI) to a maximum of 8% per year. If inflation exceeds 8% in any year, the amount is carried over into future years.

OPSEU Pension Plan – a defined benefit pension plan for employees of the Ontario Public Service and other provincial agencies, boards, commissions and organizations who are represented by the Ontario Public Service Employees Union (OPSEU) or other designated bargaining units.

OPSEU Pension Trust (OPTrust) – the organization that administers the OPSEU Pension Plan and invests and manages the Plan’s assets in the interests of its members and pensioners. OPTrust is governed by a 10-member Board of Trustees. Five Trustees are appointed by each of the Plan’s sponsors – the Ontario Public Service Employees Union (OPSEU) and the Government of Ontario.

Pension Benefits Act (PBA) of Ontario – legislation that sets out the rules for pension plans registered in the Province of Ontario. Pension plans must comply with these rules in their day-to-day operations.

Plan sponsors – the Government of Ontario and OPSEU. They each appoint five trustees to the OPTrust Board, which oversees the OPSEU Pension Trust.

Prescribed retirement savings arrangement – a Life Income Fund, a locked-in retirement income fund, a locked-in retirement account (Locked-in RRSP), a RRIF or an RRSP.

Public Service Pension Plan (PSPP) – the predecessor plan to the OPSEU Pension Plan and the pension plan for employees of the Ontario Public Service and other provincial agencies, boards, commissions and organizations who are not members of the OPSEU Pension Plan. The PSPP is administered by the Ontario Pension Board.

Reciprocal Transfer Agreement – service may be transferred into or out of the OPSEU Pension Plan under the Major Ontario Pension Plans (MOPPs) Transfer Agreement or a bi-lateral agreement.

Vested – when a member has earned the right to receive a pension. Benefits accrued after December 31, 1986 are vested after two years’ credit or continuous membership. Before December 31, 1986 your service is vested after 10 years of plan membership, credit or employment or if you are 45 or older and have 10 years’ continuous employment.

60/20 – a permanent early retirement option allowing members who are age 60 or older and have at least 20 years of credit to retire with an unreduced OPTrust pension.