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Once OPTrust receives the complete application and confirms the member’s
eligibility, we will send an Agreement to Purchase Credit (OPTrust 1017) to the
member’s home address. This form provides the member with information on the
available payment options depending on the circumstances and the cost of the
buyback.
In most cases, members can pay for their buyback in a lump sum, either by cheque
or money order. Lump sum payments can also be made through a direct transfer
from a tax-sheltered source such as an RRSP. In some cases, a direct transfer
from a tax-sheltered source may be the only payment options permitted under CRA
rules.
A lump sum payment is the only option for buybacks costing less than $500.
For buybacks costing more than $500 the member may opt to pay through a series
of biweekly payroll deductions. This option is only available to classified
(permanent) full-time and part-time employees (i.e. not
unclassified/seasonal/contract employees). The cost for this option includes
interest as well as the principal cost.
If the member is eligible for this option, OPTrust will include an amortization
schedule along with the Agreement to Purchase Credit. The minimum payment is
$10.00 per pay period, based on a maximum payment period of 10 years. The
minimum payment must cover interest charges as well as some portion of the
principal.
Classified full-time and part-time employees may also opt to pay for buybacks
costing more than $500 through a combination of lump sum payments and payroll
deductions. If the member chooses the combination option, the amount remaining
to be financed after any lump sum payment(s) must be equal to or greater than
$500.
Members who are on an unpaid leave of absence, including WSIB or LTIP, or who
work on a seasonal or unclassified basis may be able to make other arrangements
to pay for their buybacks. Options include providing a series of post-dated
cheques, or regular quarterly payments.
The form and timing of the employer payment matches that selected by the member
(e.g., lump sum vs. payroll deductions). The employer does not have the option
to prepay the employer portion of the buyback.
Payroll Deductions
The method for tracking and remitting buyback-related payroll deductions differs
for the OPS and other employers that are part of the CORPAY system and non-CORPAY
employers:
- For CORPAY employers, OPTrust’s Data Management Group sends a deduction file
to SSB every two weeks, indicating the amount of member and employer
contributions to be deducted.
- For non-CORPAY employers, we will send an OPTrust 1016 form indicating the
deduction amount for both the member and employer. These deductions must be
remitted every two weeks as part of the payroll process.
For more information, please see the section on
Reporting Pension Data.
Monthly, Quarterly and Lump Sum Payments
For all buyback payments received directly from the member, we will notify the
employer of the amount of any corresponding employer payment to be remitted to
OPTrust.
Revised September 3, 2004
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