Joining the OPSEU Pension Plan
Joining the OPSEU Pension Plan
Who are the Members of the OPSEU Pension Plan?
How do you get credit in the OPSEU Pension Plan?
Transfers to and from the OPSEU Pension Plan
HOW COULD PENSION CREDIT CHANGE WHILE YOU ARE A MEMBER?
WHAT COULD HAPPEN TO YOUR PENSION BENEFIT IF YOUR SPOUSAL RELATIONSHIP ENDS?
How do you get credit in the OPSEU Pension Plan?
BUILDING CREDIT
Pensionable service credit (credit) is the total period of time during which you contribute to the pension fund or have contributions made on your behalf. The amount of credit you build up, or “accrue,” in the Plan depends on whether you work full-time or part-time. If you work full-time you normally make contributions to the Plan based on your full-time salary and you accrue a full year of credit in the Plan for each calendar year of employment. If you earned $52,000 (as in the example in the contribution section), your contributions to the OPSEU Pension Plan would be approximately $4,768* in 2012, based on the Plan's contribution formula.
*All calculations use the 2012 YMPE. Actual contributions will vary depending on the YMPE set by the CPP.
WORKING PART-TIME
If you work part-time, you contribute to the Plan based on the percentage of time you work, compared to full-time employment. For example, if you work 50% of full-time work, you accrue 50% of one full-time year – or six months – of credit in the Plan. The example shows the calculation for your contributions based on part-time earnings of $20,000 as well as your credit and the amount of your earned pension.
Example:
Let's assume you worked part-time for 20 years. During your final year
your
pay was based on the full-time equivalent annual salary rate
of
$40,000, but because you worked part-time (50% of full-time),
you
earned approximately $20,000 that year.
Earnings are used to calculate contributions.
The average annual salary is based on a full-time equivalent
salary,
which is used to calculate your pension.
Calculating your contributions:
Your contributions to the Plan are calculated based on your earnings. This means that the contribution formula is applied to the $20,000 yearly earnings. Let's assume that you planned to retire at the end of 2012. Your 2012 contributions to the Plan would be calculated as:
| 9.4% of your salary up to the YMPE* | .094 x $20,000 = $1,880 |
| you do not have salary above the YMPE | |
| Your total contributions for 2012 | = $1,880* |
*All calculations use the 2012 YMPE. Actual contributions will vary depending on the YMPE set by the CPP.
Credit:
Since your earnings are 50% of full-time, so is your accumulated pensionable service credit. You therefore accrue six months of credit for each year of employment. So after 20 years you will have earned 10 years (6 months x 20 years) of credit.
Pension calculation:
Your pension calculation uses your best five-year average annual salary. In this example, your best five-year average annual salary was $40,000. It is this $40,000 that is used in your pension calculation together with the total credit you accrued during your 20 years of Plan membership – not your earnings of $20,000.
| .02 x $40,000 x 10 years | = $8,000 |
| minus | |
| CPP integration: | |
| .00655 x $40,000 x 10 years | = $2,620 |
| Annual lifetime pension payable at age 65 | = $5,380 |
PRE-RETIREMENT PART-TIME EMPLOYMENT
With the approval of your Deputy Minister, you may be allowed to switch from full-time to part-time employment within five years of retirement. After obtaining the consent of the Deputy Minister you must submit your notice to your employer to retire within five years. This special provision lets you work part-time while making full-time contributions to the Plan so that you accrue full-time credit. Contact your employer to find out if you qualify for this provision.