|
|
 |
 |
|
|
|
|
|
|
Winter 2009, Number 49
Printer Friendly Version: PDF  (3MB)
In this issue
OPTrust pensions to increase by 2.5% in 2009
OPTrust pensions will increase by 2.5%, starting in January 2009. 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, as measured by the Consumer Price Index (CPI).
The full 2.5% increase applies to all OPTrust retirees who retired in 2007 or earlier.
For retirees whose pension started after January 2008, the increase will be pro-rated based on the month your pension started, for the first year only. For example, if you retired in June, you would receive an increase of 1.25% in 2009. You will receive the full annual increase in 2010.
The annual increase also applies to OPTrust survivor pensions and to the deferred pensions of former and divested OPTrust members. Last year’s increase was 1.8%.
How OPTrust calculates the annual increase
OPTrust calculates the annual increase by dividing the CPI average for the two 12-month periods ending the previous September. For example, the 2009 escalation factor and resulting 2.5% increase were calculated as follows:
The maximum increase in any year is 8%. An increase above that level is carried forward and applied in the next year when the adjustment is below 8%.
OPTrust pension grows in retirement
Here’s an example showing how the annual increase affects your OPTrust pension overtime. Ellen retired in 1999 with an annual pension of $25,000. This chart illustrates the growth of her pension during a 10-year period. Starting January 2009, Ellen will receive an annual pension of $31,195.
The main reason for adjusting your pension for inflation is simply to protect your purchasing power in retirement. Since the Plan’s inception, cumulative annual inflation adjustments have totaled 32.4%. This means that with inflation adjustments, an annual pension of $20,000 per year payable in 1995 would be worth $26,486 in 2009.
For more information
More information about inflation protection and the OPSEU Pension Plan is available in the OPTrust Fact Sheet on Inflation Adjustments.
Consumer Price Index
The Consumer Price Index (CPI) is a measure of price movements, produced by Statistics Canada. The CPI is calculated by comparing the retail prices of a representative “shopping basket” of goods and services at two different points in time. This “shopping basket” includes a range of goods and services including food, fuel, transportation, home energy and shelter. |
|
|
Return to top of page
Your 2009 Pension Pay Dates
Mark your calendar. Your OPTrust pension will be paid in 2009 on the following dates:
The full calendar is available online.
NEW RETIREES
New retirees receive their first pension payment effective the first of the month following their retirement. So, if you retired on January 16th, you can expect to receive your first payment on February 26th.
|
Return to top of page
Market volatility does not affect the security of your OPTrust pension
Between September and December 2008, Canadian and international investment markets experienced sharp declines in response to the deepening global financial crisis.
As a long-term investor, OPTrust anticipates that market returns may experience significant short-term volatility from time to time. That is why our investment program has been designed to consider market risk and return in the asset classes in which we invest over a five-to-10 year time horizon. The goal is to achieve the long-term returns needed to pay for our retirees’ and members’ pensions.
Financial results
Like all major institutional investors, OPTrust is affected by trends in the markets we invest in. Our investment returns for 2008 and their impact on the Plan’s financial position will be released in April as part of our 2008 annual report.
A secure pension
In the meantime, OPTrust’s retirees and members enjoy the security and peace of mind that comes with a defined benefit pension.
The OPSEU Pension Plan is a “defined benefit” plan. This means that when you retired, your pension was calculated based on your best five-year average salary and years of credit in the Plan.
Unlike a defined contribution pension plan, individual RRSPs and other personal investments, your OPTrust pension is not affected by fluctuations in the financial markets. Instead, you receive a secure monthly pension that increases each year to keep pace with inflation.
Your OPTrust pension is backed by the Plan’s assets and the future contributions of our more than 47,000 members and the Government of Ontario.
Plan surplus
According to our recent actuarial valuation, the OPSEU Pension Plan had a $470 million funding surplus as of December 31, 2007. This reflects OPTrust’s strong investment returns from 2003-2006. In 2008, the Plan’s sponsors, OPSEU and the Government of Ontario, chose to add this surplus to their existing contribution rate stabilization funds, bringing the total stabilization reserves to $878 million, as of the start of 2008.
The sponsors can use these funds to offset the impact of any future funding loss that may result from the current market downturn.
Look for more information on OPTrust’s financial and investment performance in the spring issue of The Pension Connection due out in April 2009.
|
Return to top of page
Service Spotlight: Reminding retirees about CPP integration
At OPTrust we’ve developed a service delivery model to target retirees and members with the information they need at key stages in their lives. Our targeted approach means you have more information to help you understand the value of your pension and what it means for you in retirement.
Whether it’s understanding inflation protection or preparing for the tax season, we are always looking at initiatives to keep you informed about one of the most valuable components to your retirement income.
During 2008, OPTrust mailed over 1,000 letters to retirees and survivors, providing them with information on how pensions are integrated with the Canada Pension Plan (CPP) at age 65. Each retiree and survivor receives a statement that outlines his or her CPP-integrated pension amount. The package provides retirees and survivors with another planning tool in retirement.
Of course, if you have a question about your pension, you can send a secure e-mail through Online Services or to email@optrust.com.
Return to top of page
OPTrust named one of Canada’s Top 100 Employers for second year running 2009
OPTrust was named one of Canada’s Top 100 Employers for 2009. This marks the second year in a row that OPTrust has been selected for the award, which is sponsored by Maclean’s magazine.
“It is an honour to be recognized again as one of Canada’s leading employers,” said Heather Gavin, OPTrust’s Chief Administrative Officer and Plan Manager.
“At OPTrust, our staff is critical to our success in delivering the finest service to our members and retirees, and managing the Plan’s investments to ensure the long-term security of our pension promise,” Gavin said.
This award recognizes OPTrust’s commitment to deliver on its pension promise to provide service and security to over 81,000 retirees and members.
|
Return to top of page
Facts About… Insured Benefits Administration
Wondering who to contact about your insured benefits claims? Want to know how your benefits are administered? If you qualify for insured benefits in retirement, you may have questions about your coverage, when a claim will be processed or who to contact.
While your eligibility for coverage is based on service and credit in the OPSEU Pension Plan when you were an active member, insured benefits are provided separately by the
Government of Ontario and administered by Great-West Life.
OPTrust’s role is to maintain records of your insured benefits coverage (e.g. single or family coverage) and update this information, as required. We also provide you with information about any changes to your premiums, in The Pension Connection or your Pensioner Information Change Statement (PICS).
Insured benefits for eligible retirees include coverage for: dental, supplementary health and hospital and basic life insurance. The premiums for these benefits are paid by the Government of Ontario. For retirees who have vision care and hearing aid plan coverage, OPTrust deducts the premiums from your monthly pension.
Who to contact
If your questions are about coverage of a specific drug, treatment or procedure, contact
Great-West Life at 1-800-461-6090 or www.greatwestlife.com. If you want to know if you are covered for benefits or if you have a general question, contact OPTrust.
Great-West Life Online
Did you know your claims can be tracked online through the Great-West Life website?
When you sign up for GroupNet, Great-West Life’s secure member website, you can:
- sign-up for Direct Deposit Claim Payments – claims paid directly into your bank account
- view your claim status and Explanation of Benefits for the past 24 months
- complete and print personalized claim forms
- access Great-West Life’s special Health and Wellness section
- look up common group insurance terms and Frequently Asked Questions.
To find out more or to register, visit the Great-West Life website and click “GroupNet for Plan Members.”
|
Retiree Profiles: Share your story
Do you volunteer in your community? Do you have retirement advice for OPTrust retirees and members? Maybe you’ve returned to work on a part-time basis. We want to learn more about what you’re doing in retirement. Send an e-mail to communications@optrust.com, and your story may be featured in a future issue of The Pension Connection.
|
Return to top of page
Pension Quiz: How well do you know your pension plan?
Return to top of page
You Asked…
Question: Does the current financial crisis affect the security of my OPTrust pension?
Answer: No. Your OPTrust pension is a defined benefit pension. That means that it is calculated based on the Plan’s pension formula. So, your OPTrust pension is based on your years of credit in the Plan and your best five-year average annual salary when you retired.
Unlike a defined contribution pension plan, RRSPs or other personal investments, the value of your OPTrust pension is not affected by changes in investment market returns. Once you retire, your OPTrust pension is payable for your lifetime, and increases each year to reflect changes in the cost-of-living.
Question: I turned 65 this month. How do I change my TD1 claim amount?
Answer: If you are registered for OPTrust’s secure Online Services you can log-on and update your TD1 information from your secure homepage. The TD1 form is also available on our website under the “Forms” section for pensioners or by contacting OPTrust.
Question: I’m planning a move to Florida. How can I access my pension from the U.S.?
Answer: OPTrust provides direct deposit payments to financial institutions anywhere in the United States. We can deposit your monthly pension to the financial institution of your choice.
You can provide your new banking information through our secure Online Services or by completing a Personal Information Change Request (OPTrust 1004) form available online.
Question: Do insured benefits with Great-West Life continue past age 65?
Answer: Your insured benefits with Great-West Life remain the same except for drugs that are covered under the Ontario Drug Benefit Plan (ODB). The Ontario Drug Benefit Plan for senior citizens goes into effect when you turn 65. It covers the cost of certain drugs according to a formula. If that drug is covered by the ODB, Great-West Life will not reimburse you for the cost.
Have a question about your pension? Want to know more about a certain topic? You have several ways to find the answer you’re looking for:
- Visit the “Pensioner” section on the OPTrust website where you’ll find answers to various frequently asked questions.
- When you sign-in to your Online Services account you can send and receive messages in a secure environment. Don’t have an Online Services account? You can also send a secure message from the “Contact Us” section on our website.
- You can contact our Member and Pensioner Service staff by phone at 416-681-6100 or 1-800-637-0024 (toll-free in Canada).
Return to top of page
Your PICS is coming soon
Want to see how your pension will increase in 2009? Want to know your monthly tax deductions? Watch out for your Pensioner Information Change Statement (PICS) coming soon to your Online Services account and your home mailbox.
OPTrust sends the PICS to all retirees every January to report the inflation adjustment increase, and again when there are changes to pension amounts (e.g. insured benefits premium rates).
|
|
Your PICS provides detailed information about your pension including your:
- CPP integration pension amount
- federal and provincial TD1 claim amounts
- spousal information on record
- basic life insurance amount
- monthly tax deductions
You can also view your pension information at anytime when you register for Online Services. Each month you’ll get a clear picture of your OPTrust pension through your secure Online Services account.
|
Return to top of page
Moved Recently?
Planning to move soon? Did you know address changes can be made directly through our secure Online Services? As a registered user, you can update your:
- home mailing address
- e-mail address
- beneficiary information
- banking information
- communications preferences – whether you want to receive material from OPTrust
It’s always a good idea to keep your mailing and e-mail addresses up-to-date, that way we can notify you of important information about your pension.
Not registered for Online Services yet? Click here and follow the instructions.
|
| |
