Your Pension and Leaving Your Employment

TABLE OF CONTENTS

COMMON PENSION TERMS


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	Commuted value – the amount of an immediate lump-sum payment in today’s dollars, estimated to be equal in value to your future lifetime pension. 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 (YBE) and the Year’s Maximum Pensionable Earnings (YMPE). Credit – the total period of employment (in years and partial years) during which you contribute to the Plan or for which contributions are made on your behalf. If you work part-time your credit is prorated. Deferred pension – your future pension, determined at the time your plan membership ends and payable at the Plan’s normal retirement age (age 65). A deferred pension from OPTrust is also payable as a reduced pension, starting at age 55 or older. Immediate pension – a pension payable at the end of the month following the month of termination from the Plan. An immediate unreduced pension may be payable to a member who qualifies for the Factor 90 or 60/20 options or at age 65. An immediate reduced pension is payable as early as age 55. Indexing (inflation protection) – an annual adjustment to the amount of your pension designed to offset the effects of inflation. OPTrust pensions are increased annually, based on changes in the Consumer Price Index, to a maximum of 8% per year. Any increase above 8% is carried over and applied in future years. Locked-in – a legal requirement that vested pension benefits must be used to provide a lifetime retirement income and cannot be released as an immediate cash payment. Locked-in retirement arrangement – a tax-sheltered retirement savings arrangement from which funds may not be withdrawn before age 55. Examples include annuities, Locked-in Retirement Accounts (LIRA), Life Income Funds (LIF), Locked-in Retirement Income Funds (LRIF), and other registered pension plans that will accept the commuted value of a deferred pension. Termination – in the OPSEU Pension Plan “termination” of plan membership means that you stop making contributions to the pension plan because your employment has ended. Employment could end because of retirement, layoff, dismissal, resignation, death or permanent disability. Vested – when a member has earned the right to receive a pension, based on his or her membership and credited service in the Plan. For service after 1986, your pension benefits are vested once you have two years of credit or continuous membership. For service before 1987, your pension is vested after 10 years of continuous plan membership or credit, or if you are age 45 or older with 10 years of continuous employment.
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