The quarterly newsletter for members of the OPSEU Pension Trust
Winter 2011, Number 51
In this issue...
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Membership gives OPTrust high ratings in survey
In September 2010, OPTrust conducted a telephone survey with a random sample of 400 members and pensioners to gather their feedback on our communications program, service delivery, satisfaction with OPTrust and a general understanding of the pension plan.
Despite the economy and the Plan’s contribution rate increase, members and pensioners give OPTrust high ratings in delivering service and communications to meet their individual needs.
Some of the research findings include:
- Overall satisfaction with OPTrust’s communications program is at an all-time high for members 8.1/10 compared to 7.5/10 in 2002 when our communications program was last surveyed. Pensioners gave us a slightly higher rating at 8.6/10.
- Satisfaction with our phone and e-mail services is high, with 8.9/10 and 8.8/10, respectively. What’s more, 9 out of 10 members reported that when contacting OPTrust by phone their issue was resolved generally with the first phone call.
- An increasing number of members and pensioners are turning to the OPTrust website for information and pension transactions; 68% of members visit our website regularly this has more than doubled over the last eight years. Members rated our website 8/10 and pensioners gave the site 8.6/10 rating.
- When surveyed about the contribution rate increase to manage the Plan’s funding deficit, 63% of members understood why the increase was approved and 86% preferred an increase in rates rather than a reduction to their future pension benefits.
- The research also showed that the majority of members (67%) understood the approved contribution rate increase, matched by the employer, means there will not be a reduction to their future OPTrust pensions.
- More than two-thirds of members agree that OPTrust communicates well whether it’s changes to your pension plan, annual investment results or your pension options.
- Approximately 70% of members read some or most of OPTions, while 30% read some of our annual highlights report included in the newsletter every spring. Members said that OPTions helps them feel connected to the pension plan.
- In surveying members’ awareness of OPTrust’s key publications, 90% of members are aware of OPTions, 89% are aware of the Annual Pension Statement, 63% are familiar with our booklet It’s Your Pension and 47% have heard of Your Pension and Planning Your Retirement, our booklet geared to members five to ten years from retirement.
- Seven out of 10 members said it is very important to provide the annual highlights report each year, with a strong interest in the Plan’s investment performance from year to year, however only 30% have read them. Of those who have read the highlights report, 80% rate it as somewhat useful.
- Lastly, our research shows that members have confidence in their pension plan to provide them with a secure pension at retirement. More than half of members believe that OPTrust is friendly and approachable.
Going forward, OPTrust will continue to look at opportunities to deliver the high level of service and communications you’ve come to expect from us. At the same time, we’ll enhance our wide range of communications material and expand our electronic communications to give you relevant and timely information when you need it.
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Coming soon: Your new Annual Pension Statement
Your Annual Pension Statement is coming soon and it has a new look. We have updated your statement to give you the information you need in a clear, concise format.
The redesigned statement is based on feedback we received from members like you. In focus groups, you told us that your statement is an important planning tool that should be easy-to-read, informative and well organized. In turn, we’ve changed the statement to deliver what you’ve asked for.
All the information from the previous statement is featured, including your:
- pension estimates
- beneficiary information
- best average annual salary
- credit
- contributions and interest
What’s new?
Your statement shows your pension data on the left-hand side with a description of the content on the right side. We’ve personalized each statement to show the information that is relevant to you and removed sections that do not apply to you.
The new statement shows your pension estimates at December 31, 2010 in a highlighted box and what you will receive if you:
- stopped contributing to the Plan at year-end
- contribute to the Plan up to your earliest retirement date
- continue to contribute to the Plan up to age 65.
Your statement shows OPTrust’s pension formula and how we calculated your lifetime pension using your personal data.
Look for more information with your electronic or printed statement this spring.
Go paperless with Online Services
When you register for OPTrust's secure Online Services site, you can change your communications preferences to receive an electronic statement only. The statements will be available in the spring.
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Your 2010 Annual Buyback Statement and tax receipts
If you made a buyback payment during 2010, OPTrust or your employer will send you information for your income tax return.
Income tax receipts
Like your regular pension contributions, some buyback payments are tax-deductible. For most employees who made a buyback payment in 2010 from a non-tax sheltered source, OPTrust will send you an official income tax receipt by the end of February. You should report your buyback contributions on your 2010 income tax return along with the regular pension contributions shown on the T4 slip you receive from your employer.
Annual buyback statements
If you were continuing to make periodic buyback payments as of December 31, 2010, you will also receive an Annual Buyback Statement. This statement shows how much Your 2010 Annual Buyback Statement and tax receipts credit you are buying, the total cost, your 2010 payments, and the outstanding balance at year-end. Your electronic statement is available through your secure Online Services account. Printed copies of the statement were mailed in February.
If you completed your buyback payments in 2010, you will not receive a buyback statement. Any buyback payments made over the year will be listed on your 2010 Annual Pension Statement available online in the spring.
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2011 inflation protection increase: 1.4%
In January 2011, OPTrust pensions for retirees, deferred and divested members increased by 1.4%. The adjustment is the result of the OPSEU Pension Plan’s inflation protection feature and reflects the rise in the cost of living in Canada. The cost of living is determined by the Consumer Price Index (CPI) and reported by Statistics Canada.
The CPI used by OPTrust reflects the cost of a weighted basket of over 600 goods and services that are typically purchased by Canadian consumers every month. These weights ensure that a 10% price increase in rent, for example, would have a greater impact on the index than a 10% increase in the price of milk.
For more information
Learn more about OPTrust’s inflation protection feature in our fact sheet Inflation protection for your pension.
Got a question about your OPTrust pension and retirement?
Not a problem. Simply log in to your secure Online Services account and send a message to OPTrust. When our response is ready, we’ll send you an e-mail notice with a link to Online Services, so you can log on to retrieve our reply. No one else can view your question or OPTrust’s response.
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Board appointments
OPTrust’s Board of Trustees has named Maurice Gabay as its new Chair, and Scott Campbell as the Vice-Chair and appointed Tracie Crook to the Board.
"It is an honour and a significant responsibility to serve our members and retirees as Chair of OPTrust's Board," says Gabay. "Together the Trustees are committed to working with the Plan's sponsors and OPTrust's staff to ensure the long-term security of the pension promise."
Maurice Gabay, who recently served as Vice-Chair, was re-appointed to the Board in 2008 having previously served as a Trustee from 2005 to 2007. He is a senior member of OPSEU’s staff, serving as the union’s accountant. Gabay replaces Tony Ross who served as the Board’s Chair since 2008 and Vice-Chair from 2006 to 2008 during his years as a Trustee.
“It is an honour and a significant responsibility to serve our members and retirees as Chair of OPTrust’s Board,” says Gabay. “Together the Trustees are committed to working with the Plan’s sponsors and OPTrust’s staff to ensure the long-term security of the pension promise.”
"It is a privilege to take on the role of Vice-Chair of OPTrust's Board. I look forward to working with my fellow Trustees, OPTrust management and staff to ensure that the short and long term needs of the members and pensioners are met," says Campbell.
Scott Campbell joined the Board of Trustees in 2009. With a career spanning 30 years in the Ontario Public Service (OPS), Campbell was the first Corporate Chief Information Officer (CIO) for the Government of Ontario.
“It is a privilege to take on the role of Vice-Chair of OPTrust’s Board. I look forward to working with my fellow Trustees, OPTrust management and staff to ensure that the short and long term needs of the members and pensioners are met,” says Campbell.
"I consider it a privilege to be appointed to the OPTrust Board of Trustees, and I'm very excited about the opportunity," says Crook. "It's a chance to work with an accomplished Board and Management team and contribute to the future successes of the organization."
Tracie Crook was appointed to the Board of Trustees by the Government of Ontario in November 2010.
Crook was formerly President and CEO of ResMor Trust Company. In this role, she was responsible for the company’s growth and development, including overseeing its strategic direction, operations, and regulatory relationships with the Office of the Superintendent of Financial Institutions (OSFI) and Canada Deposit Insurance Corporation (CDIC).
Prior to ResMor, Crook held senior roles at the Toronto Stock Exchange, Sprint Canada, and Siemens in New York. Her expertise encompasses strategic planning, operations, reengineering/streamlining and relationship management.
Crook moved to Canada from Michigan in 2001. She holds a Bachelor of Business Administration from Ferris State University, a Master’s degree in General Administration from Central Michigan University, and has completed the Queen’s University Executive Program. Crook is a board member of Housing Services Inc. and Big Brothers Big Sisters Toronto, and sits on the advisory board of the National Black MBA Association (NBMBAA). She is a member of the Young Presidents’ Organization (YPO) and the International Women’s Forum (IWF) and mentors and hosts networking events for women.
“I consider it a privilege to be appointed to the OPTrust Board of Trustees, and I’m very excited about the opportunity,” says Crook. “It’s a chance to work with an accomplished Board and Management team and to be a contributor to the future successes of the organization.”
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Your Annual Highlights Report for 2010 is coming in June
Want to know how your pension plan performed in 2010? Interested in an update on the Plan’s investment strategy? Look for the answers to these questions in our 2010 Annual Highlights Report to OPTrust Members.
Your annual highlights report will be included as a special supplement in the OPTions newsletter. Our full annual report, including the Plan’s audited financial statements, will also be available in June, 2011.
Be the first to know when both reports are available online when you set your communication preferences for e-news.
Simply register or log in to our secure Online Services. Then click on “Communicate with OPTrust” and follow the links to set your communications preferences and start receiving your newsletter and news alerts online.
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Working part-time and contributing to your OPTrust pension
When you work part-time, you contribute to your OPTrust pension based on the percentage of time you work, compared to full-time employment. For example, if you work 50% of full-time work, you accrue 50% of one full-time year or six months of credit in the Plan.
The example shows the calculation for your contributions based on full-time earnings of $60,000 as well as your credit and the amount of your earned pension.
Let’s assume you worked part-time for 20 years. During your final year your pay was based on the full-time equivalent annual salary rate of $60,000, but because you worked part-time (50% of full-time), you earned approximately $30,000 that year.
Calculating your contributions
Your contributions to the Plan are calculated based on your annual full-time pensionable salary, then pro-rated to the percentage of time worked. Let’s assume that you planned to retire at the end of 2011. Your 2011 contributions to the Plan would be calculated as:
| 8.4% of your annual full-time salary up to the YMPE* |
|
| .084 x $48,300 |
= $4,057 |
| plus |
|
| 10% of your annual full-time salary above the YMPE |
|
| .10 x [$60,000 – $48,300] |
= $1,170 |
| x 50% |
|
| Your total contributions for 2011 |
= $2,614* |
Determining your credit
Since your earnings are 50% of full-time, so is your accumulated pensionable service credit. You therefore accrue six months of credit for each year of employment. So after
20 years you will have earned 10 years (6 months x 20 years) of credit.
How your pension is calculated
Your pension calculation uses your best five-year average annual salary. In this example, your best five-year average annual salary was $55,000. It is this $55,000 that is used in your pension calculation together with the total credit you accrued during your 20 years of Plan membership not your earnings of $30,000.
2% x $55,000** x 10 years
minus |
= $11,000 |
| CPP integration: .00655 x $46,080† x 10 years |
= $3,018 |
| Annual lifetime pension payable at age 65 |
= $7,982 |
* All calculations use the 2011 Year's Maximum Pensionable Earnings ($48,300). Actual contributions will vary depending on the YMPE set by the CPP.
** Your best five-year average annual salary.
† To calculate integration with the Canada Pension Plan, OPTrust uses the lesser of: your best average annual salary and your final five-year average YMPE. In this example, the final five-year average is $46,080.
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Your retirement planning checklist
Thinking of retiring soon? Wondering what forms you need to start your OPTrust pension? OPTrust has developed a retirement planning checklist for members nearing retirement.
We also suggest you read our booklet Your Pension and Planning Your Retirement to help you get started with your retirement plans.
Your 2010 Annual Pension Statement and OPTrust’s online calculators pension estimator and retirement income calculator are additional tools that will help give you a clear picture of your future retirement income and options.
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You asked...
Question: I have pension service with another pension plan. Can I transfer it to OPTrust?
Answer: You may have the option to transfer your service to OPTrust, depending on which plan your pension is with. OPTrust has transfer agreements with many of the Canadian public and broader public sector pension plans. Please contact us for a current list. If you are joining the OPSEU Pension Plan and want to transfer your service, please notify us immediately. There are deadlines for transferring your service and we can inform you of the terms and begin the process to inform you of any costs that may be involved.
Question: I plan to take a contract position with the Association of Management,
Administrative and Professional Crown Employees of Ontario (AMAPCEO). How will this affect my OPTrust pension contributions? Do I need to buy back my service when I return?
Answer: If you are seconded to AMAPCEO or management (i.e. take an acting position but retain your OPSEU-represented position), then you continue to contribute to the
OPSEU Pension Plan for the duration of your secondment. When your contract ends you return to your OPSEU position. Your contributions to the Plan continue uninterrupted throughout. If there is a break in employment between contracts, the transfer of your accrued pension between plans would be on a voluntary basis.
Question: If I pay for my buyback using funds from my RRSP account, will it affect my taxes?
Answer: No. When you use funds from an RRSP account to pay for a buyback there are no tax implications because you are directly transferring funds from one tax-sheltered vehicle to another.
Question: I plan to take a one-year educational leave of absence from work and contribute to my pension at the same time. Do the new open option buyback rules affect me?
Answer: No. The open option buyback provision does not affect your eligibility to make contributions during your self-funded leave of absence, as your pension contributions will continue, as arranged with OPTrust or your employer.
If you apply to buy back the service after the 24-month application window then the open option buyback rules apply. The cost for your service is calculated on an actuarial basis where we use a number of factors such as your age, salary rate, the amount of service you are purchasing, as well as assumptions relating to interest rates and life expectancy to determine the current cost of the additional pension you will receive if you complete your purchase and the potentially earlier eligibility date.
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Reminder: Contributions increase by 1% in 2011
Your pension contribution rate increased by 1% of salary in January 2011. The increase represents the second phase of a gradual 3% increase in members’ and employers’ matching contribution rates, which is being implemented in three annual increases of 1%.
The phased increase in contribution rates was approved by the Plan’s sponsors in 2009 as part of a proactive strategy for managing the Plan’s funding shortfall resulting from its 2008 investment losses. Under this strategy, member and employer contribution rates were raised by 1% of salary in January 2010 and another 1% January 2011. The third increase is scheduled for January 2012.
As a result, contribution rates for both member and employer contributions will be calculated as follows:
| Year |
Percentage of Salary |
Up to YMPE |
Above YMPE |
2011 |
8.4% |
10% |
Starting in 2012 |
9.4% |
11% |
The table below provides examples of how members’ contributions will increase in 2011.
Your employer’s contributions will go up by a matching amount. The 2011 YMPE is $48,300.
Annual Pensionable Salary |
2011 Increase |
$40,000 |
$400 |
$45,000 |
$450 |
$50,000 |
$500 |
$55,000 |
$550 |
$60,000 |
$600 |
$65,000 |
$650 |
$70,000 |
$700 |
$75,000 |
$750 |
$80,000 |
$800 |
For more information on the contribution rate increase and OPTrust’s deficit management strategy, please see the news item on our website.
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Direct Contact: We bring your pension plan to you
Want to know more about the OPSEU Pension Plan? OPTrust Direct Contact sessions are a great way to learn more about your pension directly from an OPTrust representative. Non-members who are eligible to join the Plan (e.g., unclassified, contract or casual employees) are also welcome to come and learn more about enrolling in the Plan.
Getting Ready to Retire Evening Seminars
Our evening seminars are tailored for members who are within 10 years of retirement, but all members are welcome to attend.
Topics include:
- how your pension grows over your career
- how your pension is calculated and when can you retire
- what your options are if you leave your job
- what “CPP integration” means and how it affects you
- how to buy back credit for past service
- what other benefits are available, and more
Date |
City |
Location (5:30 pm - 7:30 pm) |
Status |
March 15, 2011 |
Windsor |
Holiday Inn & Suites Ambassador Bridge - 1855 Huron Church Road |
Register |
April 19, 2011 |
Orillia |
Best Western Mariposa Inn & Conference Centre - 400 Memorial Avenue |
Register |
May 18, 2011 |
Sault Ste. Marie |
Delta Sault Ste. Marie Waterfront Hotel - 208 St. Mary's River Drive |
Register |
June 14, 2011 |
Kitchener |
Walper Terrace Hotel - 1 King Street West |
Register |
Important: Space is limited. Please register at least two weeks in advance. Direct Contact sessions are designed to give you an overview of the OPSEU Pension Plan. OPTrust staff cannot provide personal financial advice.
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Direct Contact: Bringing your pension to your desktop
Missed an OPTrust Direct Contact session in your community? Now, you can view an interactive online version of our popular information session from the comfort of your home or office.
OPTrust’s online Direct Contact pension information sessions are available on our website and are designed to give you a general overview of the OPSEU Pension Plan and the options that may be available to you.
You have a couple of options to learn more about your pension:
- Getting ready to retire (evening sessions in your community): Our evening seminars are tailored for members who are within 10 years of retirement but are open to all (see schedule).
- Understanding your pension (lunchtime sessions at your workplace): Our staff offers shorter lunchtime seminars for members at any stage in their careers.
- Join the Plan: We offer a 20-minute lunchtime presentation on key features of the Plan for unclassified, contract or casual employees who are eligible to join.
To book a session in your workplace or for more information, you or your employer can contact us at infosessions@optrust.com.
Of course, if you prefer to meet with our Member and Pensioner Services staff face-to-face, you can attend an upcoming session in your community and learn directly from an OPTrust representative.
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Posted on March 11, 2011
