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When a retired member who is receiving a pension from OPTrust returns to work,
there may be an impact on his or her pension, depending on the amount of his or
her earnings and whether the employer contributes to the OPSEU Pension Plan.
- If the employer does not contribute to the OPSEU Pension Plan for any of its
employees, the retiree’s pension is not affected.
- If the member is re-employed, or engaged, by an employer who contributes to
the Plan for any of its employees, the impact on the member’s pension depends on
the salary earned, and whether or not the member re-joins the Plan.
If an OPTrust retiree is re-employed or engaged by an employer who contributes
to the Plan, but chooses not to re-join the Plan, his or her monthly pension is
subject to an earnings ceiling each calendar quarter.
The earnings ceiling is determined by adding the total of the member’s pension
income plus the re-employment earnings for the quarter. This amount should not
exceed the member’s final pre-retirement quarterly earnings based on the final
salary rate. If the total income in any calendar quarter after retirement is
more than the quarterly employment earnings before retirement, OPTrust will
reduce the member’s pension by the amount in excess of the pre-retirement
earnings. If this reduction is greater than the pension amount paid in the same
period, only the pension amount paid will be recovered.
Depending on the nature of the re-employment and the retiree’s age, he or she
may have the option to re-join the OPSEU Pension Plan. If the pensioner re-joins
the Plan, his or her pension stops immediately. The additional contributions
made to the Plan as a result of the re-employment will accrue additional credit.
When the employment ends, the pension will be recalculated to include this
additional credit. If the re-employed pensioner originally retired with an early
reduced pension, the pension recalculation will be actuarially adjusted to take
into account any pension payments already paid.
It is the re-employed pensioner’s responsibility to inform the new employer that
he or she is currently in receipt of a pension from OPTrust. The employer is
then responsible for completing the Pensioner’s Quarterly Re-employment Earnings
and Calculations Report (OPTrust 1008) every calendar quarter, and forwarding to
OPTrust.
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 Note!
Re-Employed Salary: The salary that should be reported on
the OPTust1008 is the earnings paid to the re-employed pensioner on pay dates
that fall within the calendar quarter and is not to be applied to the quarter in
which the pay periods fall. The earnings reported should include all payments
identified as part of the Plan’s definition of
pensionable salary.
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 Example:
If Jane Doe worked for the following pay period:
Pay Period Start: March 13, 2004
Pay Period End Date: March 26, 2004
Pay Date: April 04, 2004
These earnings would be reported as part of the second quarter report even
though the period that the salary was earned was in the first quarter.
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Note!
Retroactive Salary: When a retroactive payment is awarded to
a reemployed pensioner, the earnings are also to be reported in the period in
which the earnings were paid, not the period for which it was earned.
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Example:
John Doe, an OPSEU Pension Plan pensioner, is
reemployed with the ministry and receives a $4,200 retroactive salary increase.
The details of the transaction are as follows: January 01, 2001 to December 31, 2001: $1400.00
January 01, 2002 to December 31, 2002: $1500.00
January 01, 2003 to November 18, 2003: $1300.00
The retroactive earnings were paid to Mr. Doe on January 15, 2004. Therefore,
these earnings form part of the first quarter, 2004 earnings.
The OPTrust will recalculate Mr. Doe’s pension as well as his new earnings
ceiling.
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Revised November 26, 2004
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