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Reporting Pension Data
Background Information
Reporting Pension Data
Buyback Deductions
Under the OPSEU Pension Plan, members have the option of making buyback contribution payments through a series of regular payroll deductions. Buyback contributions made through payroll deduction are tracked and reported using one of two methods. In both cases, OPTrust calculates the cost, while the employer is responsible for making the deductions and remitting them to OPTrust on a biweekly basis.

1) OPTrust-Administered Deductions

OPTrust currently administers buyback contribution deductions for OPS employers that are part of the CORPAY system only. Under this method, OPTrust generates a deduction file (known as the “DS file”) based on members’ open buybacks and runs this file against the payroll system during the biweekly payroll process. The deduction is either completely satisfied or no deduction is taken (this applies to both the member and employer deduction). The employer does not need to track or administer any portion of the buyback.

Deduction Methodology: Deductions are requested for all members with active buybacks regardless of their current employment status (Active, on an LOA or Terminated). If the member is not paid for the period in question, no deduction will be taken. OPTrust will then follow up with the member directly to confirm his or her status and arrange for a catch up payment or the recalculation of the remaining payments.

While this method is designed for the CORPAY payroll system, the OPTrust-administered deduction file can be modified to meet other system requirements.

Codes

Only three deduction codes are used in the DS file for OPTrust-administered deduction file. This contrasts with the series of employee buyback deduction codes used for non-OPS employers. In the OPTrust-administered file, two of the deduction codes are for member contributions (054 and 055) while one is for the employer contributions only (056).

  • 054 is used for buybacks where the employee is paying both shares of the cost (i.e. special or an educational leave)
  • 055 is used for buybacks where the employee is paying their share of the cost (i.e. Non-Contributory buyback)
  • 056 is used for buybacks where the employer is matching the cost of the employee (i.e. Non-Contributory buyback).

Deduction code 054 will always appear by itself as the employee deduction covers both the employee and employer obligation. The deduction codes 055 and 056 will always appear together.

A matched buyback does not necessarily mean that the cost for the employee and the employer are the same, as the cost is calculated based on the member and employer contribution rates in effect for the period of service purchased.

2) Employer-Administered Deductions

All Agencies, Boards, and Commissions that are not part of the CORPAY system currently use this method for administering buyback contribution payroll deductions. Under this method, OPTrust provides the employer with directions regarding the deduction of member and employer contributions via the OPTrust 1016 form. These contributions are submitted as part of the biweekly data file. The payment schedule established by OPTrust must be adhered to throughout the lifetime of the buyback. Any change may adversely affect the members credit accrual. Employers should not stop the deductions or change the deduction amount without direction from OPTrust.

Important! The buyback deduction method used is not at the discretion of individual Pay and Benefits Representatives. Due to efficiency requirements, the OPTrust-Administered option may not be available to all employers. For more information, please contact OPTrust’s Data Management Group.


 
Revised March 31, 2004
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