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A Guide to your 2007 Annual Pension Statement
Your Annual Pension Statement Explained
Wondering when you can retire with an unreduced pension? Want
an estimate of your earned pension? Your Annual Pension Statement will provide answers to these and many other questions.
The 2007 statement is a snapshot of your OPTrust pension as of December 31, 2007 and it features valuable information to help you plan for your financial future, including:
- an estimate of your earned pension at year-end
- a projection of your earned pension at retirement
- the pension credit and salary information used for your calculations, as well as your total contributions
- credit for buybacks you have paid for, and/or transfers from other pension plans
- your beneficiaries on record at OPTrust.
This guide provides section-by-section explanations of the key terms and concepts used in your 2007 statement, along with answers to frequently asked questions.
We recommend that you contact OPTrust for detailed information before making any decisions about your pension. If there are any errors in your statement, please notify us.
Sample Pension Statement
Your Annual Pension Statement provides key information on your
pension entitlement with the OPSEU Pension Plan. It is divided into
four sections:
 Your Personal Information
 Your Pension Estimates
 Your Salary, Credit
and Contributions, and
 Your Beneficiary Information.
Your Personal Information
 This section includes your name, home address, birth date, OPTrust ID number, date of hire, plan membership date, as well as whether you are vested. Be sure to check that this information is correct.
Your plan membership date* is the start date of your most recent
period of unbroken membership in the Plan. This may be different from your date of hire or your continuous service date. Your plan membership date is not directly linked to your credit in the Plan, which may vary due to leaves of absence, part-time work, buybacks, transfers and other factors.
Your OPTrust ID is a unique number used to identify your records and personal information on file at OPTrust. The OPTrust ID number replaces your Social Insurance Number on the APS and other documents, and it further protects the privacy and security of your personal data. Your OPTrust ID is also used to access your personal account through secure Online Services.
Your date of hire is the first day of your most recent period of unbroken employment, as provided by your employer. Your plan membership date is the start date of your most recent period of unbroken membership in the Plan. Your plan membership date may be different from your date of hire or the “continuous service date” used by your employer. Your plan membership date is not directly linked to your credit in the Plan, which may vary due to leaves of absence, part-time work, buybacks, transfers and other factors.
Vested means you have earned the right to pension benefits from the Plan. For pensionable service after 1986, you are vested if you have two or more years of credit or continuous plan membership.
* If you have pre-1987 service, you are vested after 10 years of continuous plan membership or credit (before or after 1987), or if you are age 45 or older and have 10 years of continuous employment.
Your Pension Estimates
Your statement lists key information regarding your pension, including when you can retire and what you will receive at retirement. Your pension estimates are calculated using OPTrust’s pension formula and the information provided by your employer.
- First, we’ve provided you with an estimate of the annual pension that you have earned as of December 31, 2007. If you stopped contributing to the Plan on December 31, 2007, this amount will be payable at age 65, and reflects the Plan’s integration with the Canada Pension Plan (CPP).
- Second, we’ve projected the annual unreduced pension you would receive at your earliest retirement date.
- Third, we’ve projected the annual pension (based on your current salary) you would receive at age 65 – the Plan’s normal retirement age, if you continue to contribute to the Plan to age 65. This amount also reflects CPP integration.
Your pension estimates represent your pension before income tax and other deductions. The estimates are given in 2007 dollar amounts and do not reflect any future increases in your salary or inflation.
OPTRUST’S PENSION FORMULA
Your pension is designed to provide a steady retirement income for your lifetime, a 2% pension, in combination with CPP benefits payable at age 65. Your OPTrust pension is calculated based on the following formula:
2%
times your best five-year average annual salary
times your credit in the Plan
minus CPP integration at age 65
Your statement provides projected retirement eligibility dates for when you may be eligible to retire. These projections assume that you will continue earning credit in the Plan at your current rate, and complete your payments for any credit you have committed to buy back.
Note: The Annual Pension Statement for divested members includes the members’ anticipated pension eligibility date and an estimate of his or her pension amount assuming continued employment with the successor employer.
Under the OPSEU Pension Plan, you are eligible to retire with an immediate unreduced pension if you qualify for any of the following retirement options:
- Age 65: The normal retirement age under the OPSEU Pension Plan
- Factor 90: Age plus years of credit total at least 90
- 60/20: Age 60 or older plus at least 20 years of credit
Reduced: Available starting at age 55 to vested members who do
not qualify for an unreduced pension
Your OPTrust pension at age 65 is reduced for integration with the Canada Pension Plan (CPP). This reflects your lower contributions to the OPSEU Pension Plan for the portion of your salary below CPP’s Year’s Maximum Pensionable Earnings ($43,700 in 2007).
The reduction for CPP integration at age 65 equals:
0.655% times the lesser of either
- your average annual salary, or
- the five-year average of the Year’s Maximum Pensionable Earnings set by CPP
Times your credit after 1965 (to a maximum of 35 years)
Your Salary, Credit and Contributions
 Your OPTrust pension is paid for by your contributions and the contributions made by your employer, based on your salary and credit in the Plan.
This section of your statement features the information used to calculate your pension estimates. This includes your best five-year average annual salary and your total credit in the Plan as of December 31, 2007.
We have also provided a breakdown of your pension credit, including:
- the credit you had earned as of December 31, 2006 plus
- the credit you earned in 2007 plus
- any adjustments to your credit record made during 2007 plus
- any credit resulting from buybacks or transfers from another pension plan made in 2007.
Together these amounts equal your total credit as of December 31,
2007.
The best average annual salary used to calculate your pension is typically the average of your highest consecutive 60 months of salary, during your membership in the Plan. If you have been a member for less than five years, your average annual salary is based on your longest period of continuous membership.
Your 2007 credit reflects the periods of employment for which you contributed to the Plan in 2007. Also included are periods for which contributions were made on your behalf (e.g., under your employer’s Long Term Income Protection plan). Your credit is shown in years, with partial years expressed in decimals (e.g., 15 years and 6 months = 15.5 years).
Your total credit at December 31, 2007 includes all the credit you have accumulated in the Plan, including buybacks and transfers, to the end of 2007.
The contributions shown on your statement include your regular contributions for the year, as well as contributions made on your behalf (e.g., under your employer's Long Term Income Protection plan). Your employer’s contributions are not included in this figure.
Interest on your contributions is listed separately. Your total contributions and interest at December 31, 2007 reflects all of your contributions, including buyback payments and LTIP contributions made on your behalf, plus interest.
Buybacks and transfers include credit you bought back, and/or transfers from other pension plans you completed in 2007.
If you are buying back past service, the “total credit” listed on your statement includes credit that you have paid for as of December 31, 2007. However, any remaining credit you have committed to purchase, but have yet to pay for is listed separately under “future credit” used in your pension estimates.
The “earned pension as of December 31, 2007” shown on this statement reflects only the paid portion of your buyback. However, the statement projects an estimated pension at retirement assuming that you will complete the purchase by the time you retire.
Your 2007 adjustments include any changes to your credit resulting from correction to your pension data made during 2007.
Your Beneficiary Information
 OPTrust provides benefits for your survivors. That's why it’s important that you identify beneficiaries who will receive your survivor benefits. By informing OPTrust through our secure Online Services, we can administer payment of your survivors’ benefits according to your wishes.
This section of your statement lists the people you have named as your spouse, eligible children, designated beneficiaries and/or refund recipient, and who would receive your survivor benefits if you die before your pension begins. Please confirm that the names or organizations listed on your statement are correct.
An eligible spouse is a partner, of the opposite or same sex, who is living with you at the time of your death or termination from the Plan:
- to whom you are legally married, or
- with whom you have been living in a conjugal relationship for at least three years, or
- with whom you have a relationship of some permanence and are the natural or adoptive parents of a child.
An eligible child is a child who is:
- under the age of 18, or
- over the age of 18 and in continuous, full-time attendance at a secondary school or recognized post-secondary institution, to a maximum of five years.
Eligible children must also be named as designated beneficiaries to receive
survivor benefits for credit earned after December 31, 1986.
Your designated beneficiary is any living person or organization you wish to receive the survivor benefits linked to your credit earned after December 31, 1986, if you do not have an eligible spouse.
Your refund recipient is any person or organization you wish to receive any refund payable for your unvested service if you die before your pension begins and do not have an eligible spouse or eligible child.
SURVIVOR BENEFITS
The payment of survivor benefits is different for vested service before and after December 31, 1986. If you die before retirement and have no eligible spouse, survivor benefits will be paid as follows:
Vested service up to December 31, 1986: If you have no eligible spouse, your eligible children will receive survivor benefits for your pension credit before December 31, 1986. If there is no eligible spouse or children, your refund recipient will receive a refund of your contributions plus interest for your credit before December 31, 1986. If you have not designated a refund recipient, your contributions before December 31, 1986 plus interest will be paid to your estate.
Vested service after December 31, 1986: For credit after December 31, 1986, if you have no eligible spouse, survivor benefits are paid to your designated beneficiaries. If you have no eligible spouse or designated beneficiaries, the commuted value of your pension is paid to your estate.
Note: You must name your eligible children as designated beneficiaries if you want them to receive survivor benefits for your credit after December 31, 1986.
Unvested Service: If you die before becoming vested, a contribution refund, plus interest, is paid to the person or organization named by you, in the following order: your eligible spouse, your eligible children, your refund recipient, or your estate. The refund payable to your spouse or children equals two times your contributions, plus interest. The refund to your refund recipient or estate equals your contributions, plus interest.
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