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- Why do I have to belong to the OPSEU Pension Plan?
- Is membership optional for some people?
- How are my pension contributions calculated?
- Are my pension contributions tax deductible?
- How is my pension calculated?
- When can I retire?
- How does the Canada Pension Plan affect my OPTrust pension?
- When is my pension vested?
- What happens if I leave my job before retirement?
- Can I buy back leaves of absence or uncredited service?
- How do I identify or update my list of beneficiaries?
For more information, please see the booklet It’s Your Pension.
Need more information? Contact us
- How can I add a beneficiary or update my beneficiary information?
- Should I name my spouse as a beneficiary?
- I am single and have no children. Should I name a beneficiary?
- Why is my pension higher before age 65 than after?
- Why is my total credit different from my plan membership date?
- Why is there a change to my credit listed under "2012 Adjustments"?
- Can I buy back credit for unclassified service or a leave of absence?
- Why is the average salary listed on my statement different from my current salary?
- I work half-time and started contributing to my pension 10 years ago. Why does my statement show only five years of credit?
- What should I do if any of the information on my statement is incorrect or needs to be updated?
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Q. Why do I have to belong to the OPSEU Pension Plan?
A. The OPSEU Pension Plan exists to provide you with a secure retirement income. Members of the Plan include employees of the Government of Ontario and certain public sector organizations who are represented by the Ontario Public Service Employees Union (OPSEU).
For most OPTrust members, joining the Plan is mandatory. You must join the Plan if you are under age 65 and are:
- a permanent or probationary employee of an Ontario government ministry or scheduled agency (a “classified civil servant”) and represented by OPSEU
- a permanent employee of certain provincial agencies, boards or commissions and represented by OPSEU
- a permanent employee of the Ontario New Democratic Party Caucus and represented by OPSEU
- a permanent employee of the OPSEU Pension Trust.
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Q. Is membership optional for some people?
A. You may be eligible to join the OPSEU Pension Plan voluntarily if you are a contract, casual or “unclassified” employee of the Ontario Public Service or other employers that participate in the Plan, and are represented by OPSEU.
If your membership is optional and you decide to join the Plan, you must complete the membership forms available from your human resources department. Once you join the Plan, you cannot cancel your membership unless you leave your job.
You cannot join the OPSEU Pension Plan unless you work for the Province of Ontario or another participating employer and are represented by OPSEU.
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Q. How are my pension contributions calculated?
A. Your pension contributions are calculated as a percentage of your regular earnings and deducted directly from your pay.
Your OPTrust pension is integrated with the Canada Pension Plan (CPP). This means that you pay lower contributions to OPTrust for the part of your earnings that is also covered by CPP. The lower contribution rate applies to earnings below Year’s Maximum Pensionable Earnings (YMPE). For 2012 the YMPE is $50,100.
Your 2012 contributions to the OPSEU Pension Plan are calculated using the following formula:
| 9.4% of your salary up to the YMPE |
| + |
| 11% of your salary above the YMPE |
| = |
| Your total contributions to the Plan |
|
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Q. Are my pension contributions tax deductible?
A. Yes. Your employer will keep track of your contributions and report them on your T4 slip as contributions to a registered pension plan.
Your T4 will also show a “pension adjustment” amount. The Canada Revenue Agency (CRA) uses the pension adjustment to calculate the amount of RRSP contribution room you will have in the following year. The CRA will notify you of your RRSP room for the following year on your annual Notice of Assessment.
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Q. How is my pension calculated?
A. The OPSEU Pension Plan is a “defined benefit” pension plan. This means that when you retire, your pension will be based on your salary and your years of service credit. The amount of pension you have earned does not depend on the amount you contribute or on changing investment returns. Your OPTrust pension is guaranteed for your lifetime and will be adjusted annually for inflation.
The amount of your OPTrust pension is based on the following formula:
| 2% |
| x |
| your best five-year average annual salary rate |
| x |
| your years of credit in the Plan |
| - |
| CPP integration (a reduction at age 65) |
| = |
| Your Annual OPTrust Pension at Retirement |
|
To estimate your future OPTrust pension, visit our Pension Estimate Calculator.
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Q. When can I retire?
A. Normal retirement. The normal retirement age under the Plan is 65 which is when you are entitled to a pension based on the Plan’s pension formula.
Retiring early. If you are eligible, you can retire before age 65 with an unreduced pension under one of the Plan’s early retirement options. These include:
- Factor 90 - available to members whose age plus credit total at least 90 years
- 60/20 - available to members who are at least 60 years old and have at least 20 years of credit.
You also have the option of taking an age-reduced pension as early as age 55. In this case your pension will be reduced based on your age and/or your years of credit.
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Q. How does the Canada Pension Plan affect my OPTrust pension?
A. Your OPTrust pension is designed to provide you with a combined pension income - from both OPTrust and CPP - that equals approximately 2% of your average salary multiplied by your years of credited service in the OPSEU Pension Plan.
In effect, if you retire before age 65, OPTrust pays the full 2% pension benefit. As an active member, your OPSEU Pension Plan contributions are reduced on a portion of your earnings that is also covered by CPP. This contribution "integration" is taken into account in the way your OPTrust pension is calculated starting at age 65.
Starting at age 65, your 2% pension will be made up of an OPTrust portion plus a CPP portion.
CPP provides retirement benefits to those who have contributed during their employment. The normal retirement age for CPP benefits is 65, however, you can apply for a reduced CPP pension as early as age 60, with a 6% per year reduction.
Here is how CPP integration affects the amount of your OPTrust pension:
| Your basic OPTrust pension equals: |
| 2% |
| x |
| your best five-year average annual salary rate |
| x |
| your years of credit in the Plan |
|
| The reduction at age 65 for CPP integration equals: |
| 0.655% |
| x |
the lesser of:
i) your best average annual salary,
or
ii) your final 5-year average YMPE under CPP |
| x |
| your years of credit after 1965 |
|
Your OPTrust pension is not adjusted to reflect CPP integration until you reach 65, even if you start to collect CPP
before that age. (If you have pre-1966 credit, please contact OPTrust.)
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Q. When is my pension vested?
A. Your OPTrust pension is vested immediately, which means you have earned the right to pension benefits from the Plan.
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Q. What happens if I leave my job before retirement?
A. If you leave the Plan before age 55, you may take a deferred pension or transfer the commuted value of your pension to another retirement arrangement such as a locked-in retirement account (a “locked-in RRSP") or another employer’s pension plan.
If you are age 55 or older when you leave the Plan, you can i) choose a deferred pension, payable at age 65, or ii) choose to start receiving an age-reduced pension anytime between the ages of 55 or 65.
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Q. Can I buy back leaves of absence or uncredited service?
A. As a member, you may be eligible to purchase, or “buy back” credit in the Plan for periods of past service. Buying back credit increases your pension at retirement by adding to the total credit used in calculating your pension. By increasing your credit, a buyback may also make you eligible to retire before age 65 under one of the Plan’s early retirement options.
Depending on your circumstances, you may be eligible to buy back credit for:
- non-credited service with the Ontario Public Service (OPS) or another employer that contributes to the OPSEU Pension Plan, the Public Service Pension Plan or its predecessor Plan. This includes periods when you did not contribute - such as unclassified, contract or casual work - or periods for which your contributions were refunded.
- prior non-OPS employment with an employer who did not contribute to the OPSEU Pension Plan but provided employees with another registered pension plan.
- leaves of absence without pay for illness, pregnancy, parental, adoption, special or educational purposes, or workplace injuries (WSIB).
Time limits: There are strict time limits for applying to purchase past service credit. You must submit your application to OPTrust within 24 months of:
- the date you become a member of the Plan, or
- the last day of the leave that you are applying to buy back.
Costs:. The cost of your buyback will depend on several factors. These include the type and amount of service you are purchasing and your salary at the time your complete application is received. You can pay for your buyback in a lump sum or you may qualify to pay in a series of installments.
Please see OPTrust's booklet Your Pension and Buying Back Credit for more information.
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Q. How do I identify or update my list of beneficiaries?
A. Your OPTrust pension includes important survivor benefits, whether you die before or after you retire. To make sure these benefits are paid according to your wishes and without unnecessary delays, every member should complete OPTrust’s
Pension Beneficiaries form. You should also use this form to change or update your beneficiaries. You can also add a new beneficiary or update your current information through OPTrust's secure Online Services.
For more information on OPTrust’s survivor benefits see the factsheet Your Pension Beneficiaries.
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Q. How can I add a beneficiary or update my beneficiary information?
A. You can add a new beneficiary or update your current information through OPTrust's secure Online Services. Alternatively, you can complete the Pension Beneficiaries form. For more information on naming your beneficiaries, refer to the factsheet Your Pension Beneficiaries.
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Q. Should I name my spouse as a beneficiary?
A. No. Your eligible spouse is automatically your first beneficiary. However, it is advisable to identify someone else as a beneficiary, in case both you and your spouse die at the same time, or your spouse dies before you do. Your beneficiary should be someone other than your spouse – your children, another family member or a friend, for example. You can name one or more beneficiaries to share your survivor benefits.
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Q. I am single and have no children. Should I name a beneficiary?
A. The choice is yours. You can choose to name a person or organization. We’ll direct any payment to those named, if you die before you retire. If you don’t designate a beneficiary, we’ll issue the payment to your estate.
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Q. Why is my pension higher before age 65 than after?
A. If you take advantage of an early retirement option, your OPTrust pension will not be reduced for CPP integration until you reach age 65. At age 65, your OPTrust pension is reduced to reflect the fact that your OPSEU Pension Plan contributions are lower for the portion of your earnings that is also covered by CPP.
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Q. Why is my total credit different from my plan membership date?
A. Your plan membership date is not directly linked to your total credit in the Plan. Your credit may reflect a number of factors, such as part-time service, leaves, breaks in service, buybacks, and transfers from other pension plans. Your pension and your eligibility for early retirement are based on your total credit, not your plan membership date.
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Q. Why is there a change to my credit listed under "2012 Adjustments"?
A. Your statement is based on data provided to OPTrust by your employer. If we have found an error in your record over the past year, any correction to your salary, credit or contribution information will be listed as a "2012 Adjustment." Correcting errors allows us to provide you with more accurate pension estimates to use in planning for your retirement.
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Q. Can I buy back credit for unclassified service or a leave of absence?
A. You may be eligible to buy back credit for:
- past service – including contract or "unclassified" service – with an employer who contributed to the OPSEU Pension Plan, the Public Service Pension Plan, or its predecessor
- past service with an employer who contributed to another registered pension plan, and
- leaves of absence for which you did not contribute to the Plan.
To buy back past service, you must submit an Application for Past Service Credit
form to OPTrust within 24 months of:
i) becoming a member of the Plan, or
ii) the last day of the leave that you want to buy back.
OPTrust cannot waive the 24-month time limit.
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Q. Why is the average salary listed on my statement different from my current salary?
A. To calculate your pension, we use an average of your best consecutive five years’ salary up to December 31, 2012. This is the figure that appears on your statement. If you have been a member for less than five years, your average annual salary is based on your longest period of continuous membership in the Plan.
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Q. I work half-time and started contributing to my pension 10 years ago. Why does my statement show only five years of credit?
A. By working 50% part time over 10 years, you have earned five full years of credit. Your pension calculation will be based on this amount of credit. The calculation will also use your average annual "full-time equivalent" salary rate, not your actual part-time earnings.
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Q. What should I do if any of the information on my statement is incorrect or needs to be updated?
A. If you find any errors in your personal information or inaccuracies in the pension data on your statement, please contact OPTrust. In some cases, we may need additional documentation or we may need to contact your employer before we can make changes or corrections.
Your statement is based on information provided by your employer. If there are errors in this information, your pension estimates may change as more accurate data becomes available. An error on your statement does not entitle you to benefits not provided for by the OPSEU Pension Plan based on your actual situation. Correcting any errors on your statement will give you accurate pension information to use in planning for the future.
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