 |
Tax Reporting and Pension Adjustments |
|
 |
|
 |
|
 |
|
|
|
There are two types of member contributions that the employer remits to
the OPTrust. “Regular” contributions are deducted from the member’s pensionable
salary and past service “Buyback” deductions are optional payments of prior
service.
In all cases, a regular payroll contribution is a before tax deduction. As a
before tax deduction, the taxable income is reduced at source. No tax receipt is
required from the Plan for this deduction. However, the employer must report
these contributions and the associated Pension Adjustment (PA) on the member’s T4.
As for past service buyback deductions, the tax implications differ between
CORPAY and the Agencies, Boards, and Commissions (ABC’s). In the case of member
buyback deductions through CORPAY (the Ontario Public Service payroll system)
the deductions are completely managed by the OPTrust and are taken as an after
tax deduction. As such, the OPTrust will issue a tax receipt at year-end.
|
|
|
|
|
|
|
|
|
|
 Important! OPS Employers:
As the payroll buyback processing
and its associated receipting is handled completely by the OPTrust, the employer
should never use the OPTrust Buyback GTN codes for deductions of any kind.
|
|
|
|
|
|
|
|
|
|
|
Buyback deductions taken from members that are employed by an ABC are managed
separately by each employer. It is the responsibility of the employer to report
any deductions along with the associated PA.
Any lump sum or ongoing buyback payment received directly by the OPTrust from
the member will be reported by the OPTrust.
Revised January 28, 2005
|
 |
|
