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Deferred pensionIf you are vested when you leave your job but
are not yet eligible for an immediate pension, you have the option of
leaving your pension entitlement with OPTrust and receiving a deferred
pension, payable in the future. If you choose a deferred pension:
- You have the right to receive an unreduced pension from OPTrust,
starting when you reach age 65.
- You have the option of taking an early reduced pension payable as
early as age 55.
- If your pension entitlement is based on 10 or more years of service,
you may be eligible for insured benefits coverage when you retire.
- You may transfer the commuted value of your pension to a locked-in
retirement arrangement anytime before you reach age 55 (see the section
on commuted value transfers for more information).
SECURITY
Under the deferred pension option, you will receive a retirement income
based on the OPTrust pension formula, your average salary and your years
of credit in the Plan. The value of this “defined benefit” pension is
guaranteed and does not depend on the Plan’s investment returns.
If in the future you start a job with an employer that participates in
the OPSEU Pension Plan, your
previous credit will be linked to credit you earn in your new position.
INFLATION PROTECTION
Your OPTrust pension is protected against inflation – both during the
deferred period and once you retire. Each year, OPTrust pensions are
increased based on the rate of inflation as measured by Canada’s
Consumer Price Index. The maximum increase in any single year is 8%. The
remainder of any increase over 8% will be carried forward and applied in
future years.
Each year before your pension starts, OPTrust will send you a statement
showing the annual increase in the value of your deferred pension. Once
your pension starts, it will continue to be adjusted for inflation each
January, for the rest of your life.
EXAMPLE: Inflation Protection and Lisa’s Deferred Pension
Lisa left her job with the Ministry of the Attorney General at the end
of 1994 after 20 years of service. Post-retirement health and dental
benefits were important to her, so she decided to leave her deferred
pension with OPTrust.
Based on her average annual salary, OPTrust calculated Lisa’s deferred
pension to be $12,000, payable at age 65. In January 2004, after 9 years
of inflation adjustments, Lisa’s deferred pension was worth $14,324.
Lisa’s pension will continue to be protected against inflation for her
lifetime. |
INSURED BENEFITS ONCE YOU RETIRE
Depending on your circumstances you may be eligible for insured benefits
coverage provided by the Government of Ontario, once you start to
receive your OPTrust pension.
Who is covered?
You, your spouse and your eligible dependent children may be entitled to
insured benefits if you:
- are receiving a pension based on at least 10 years of credit in the
OPSEU Pension Plan
- are receiving a pension based on at least 10 years of continuous
employment and have credit in the OPSEU Pension Plan for some part of
each of those 10 years.
These benefits are available to eligible retirees, whether you receive
an immediate or a deferred pension. If you were employed in the Ontario
Public Service or by another eligible organization and meet either of
these criteria, you are entitled to insured benefits in retirement.
Important – If you transfer the value of your OPTrust pension out of the
OPSEU Pension Plan, you will not be eligible for this insured benefits
coverage when you retire.
A summary of benefits
Insured benefits for eligible pensioners include coverage for dental,
supplementary health and hospital, and basic life insurance. If you were
employed by a scheduled agency, board or commission outside the OPS, any
additional benefits depend on the collective agreement in place with
your former employer at the time of your termination.
The Government of Ontario pays the premiums for these benefits. For
pensioners who want vision care and hearing aid coverage, there is a
small premium that is deducted from your monthly pension payment. The
premiums for basic life insurance are paid by your employer and are a
taxable benefit.
For details on insured benefits, please refer to the Management Board
Secretariat publication: A Guide to your Benefits – After Retirement.
This booklet is available from OPTrust.
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