The 2004 increase is 3.3%, which is 100% of the rise in the Consumer Price Index (CPI) measured from September 2002 to September 2003. The pension adjustment reflects changes to the cost-of-living as measured by CPI.

Every January, we increase your OPTrust pension to keep pace with inflation.
The adjustment is applied the year after you start to receive a pension. The first pension adjustment is pro-rated for the length of time you received a pension in the previous year.
It is calculated by dividing the CPI average for the two 12-month periods ending the preceding September.

For example, the 2004 inflation adjustment was calculated as:

The maximum increase in any one year is 8%. Any increase above 8% is rolled forward into to a subsequent year, to be used when the CPI adjustment is less than 8%.

Example of pension with pro-rated inflation increase:
Terminated from Plan ..................May 2003
Pension began ..............................June 2003
Number of months on pension......7 (June–December)
CPI increase for 2004 ..................3.3%

In January 2004, your pension would be increased by 1.9% to reflect the cost of living for seven months. In following years the full CPI increase is applied.

This chart shows how the inflation protection feature of the OPSEU Pension Plan works. The graph plots the growth of an average pension over a 10-year period from 1994.

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OPTrust Web Site Delivers New Functionality

Secure Online Services
OPTrust is introducing a new service to our Web site, giving pensioners and members easy access to their personal pension information in a secure Web environment. Secure Online Services allows pensioners and members the option to conveniently change or update personal information online at any time.

“Secure, fast and easy-to-use” are just some of the comments we’ve received describing our new system. Secure Online Services was designed specifically with pensioners and members in mind. Our goal is to provide you with the ability to update and change your personal information, by giving you more convenience for some of our more common transactions such as address changes and beneficiary information.

As we continue to enhance our service offerings for pensioners and members, a key focus will be providing additional services online. This shift in moving towards more online transactions and services reflects feedback we’ve received from pensioners and members like you. It will not replace personal service at OPTrust or on the phone.

Phase 1 Features
Our new online system is being launched in separate phases with several unique features rolled out in each phase. In phase one, you can view your mailing address and beneficiary information, make changes online, and choose how you want to receive OPTrust communications all from the convenience of your home.

Change Your Address
You can change or update your home address information online rather than sending us the paper forms. Once you’ve completed the transaction your file is automatically updated.

Identify Benefit Recipients
If you want to change, update, or view your beneficiary information on file, you now have the option to do so through Secure Online Services. You no longer need to fill-out a paper form and mail it to our office.

Set your communications preferences
To serve you better, OPTrust is now offering you the ability to receive communications from us in the most convenient format for you either in print or online. When you register for the first time you are given the option to set your preferences. For example, you may want to receive The Pension Connection online and other communications in print.

Coming soon!
In February, OPTrust will add even more features to Secure Online Services that are specifically geared for OPTrust pensioners:

Change Your Banking Instructions
Whether you need to update or change your banking information, you will be able to access this information online. When you log on you’ll see your current banking information on file and then you’re given the option to update your file.

Tax Information T4A and TD1
You can access and print your T4A slip at anytime in a secure environment. As well, you will have the option to review or update your federal tax exemption amounts, or choose to request that additional tax be deducted. Any changes in your claim amounts will automatically be carried over to your provincial TD1 form.

Secure Messaging
You will be able to view answers to your confidential questions in a secure area only you can access. OPTrust will notify you by e-mail to pick-up your message.

Bookmark our site
Watch for new services and functionality as we continue to enhance our Web site. And don’t forget to bookmark our Web site!

Protecting your privacy
Keeping your personal information confidential has always been fundamental to the way we do business. Our Privacy Policy applies to OPTrust and all its representatives. In it we explain why we ask for your personal and confidential information, how we protect our records, when we release your information and how you can view, check and correct your personal information.

Register Today!
All OPTrust pensioners are invited to register for OPTrust’s Secure Online Services. Registration for online services gives you immediate access to your personal pension information.

Changes can be made at your convenience without paper forms. Your personal file is updated online the next business day.

To register online you will need to have your 2002 T4A ready.

If you do not have the necessary document, you can register by phone. Call OPTrust at (416) 681-6100 or toll-free at 1-800-637-0024, our staff are here to help you.

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Pensioner Information Change Statement

Starting January 2004, your Pensioner Information Change Statement will provide even more comprehensive information on your OPTrust pension.

The Pensioner Information Change Statement is a personalized statement for all OPTrust pensioners providing a detailed snapshot of your pension to date. The Statement is issued every January, and whenever there is a change in your monthly pension payment (e.g. inflation adjustment, insured benefits premiums, etc).

We’ve enhanced the Pensioner Information Change Statement to give you a report on your pension and personal information on file at OPTrust. The expanded statement now lists current information on record for each pensioner, including:

• CPP integration
• pension growth and accumulated pension paid
• federal and provincial TD1 claim amounts
• life insurance
• spousal information
• power of attorney on record at OPTrust

Below is a link to a sample of the new Pension Information Change Statement, which highlights the deductions, and personal information on file for the average OPTrust pensioner. Not all sections will appear on your individual statement, because each section may not apply to every pensioner.

Sample Statement

If you have questions about your Pension Information Change Statement, please contact us.

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Pensions Not Affected By Possible Funding Loss

As an OPTrust pensioner you have the financial security of a lifetime pension from the OPSEU Pension Plan. Your “defined benefit” pension is based on your years of credit and your salary while you contributed to the Plan. It’s guaranteed for your lifetime.

To ensure that the Plan’s assets are enough to cover the cost of members’ and retirees’ earned pensions, OPTrust must complete an “actuarial funding valuation” at least once every three years. We also carry out an interim valuation every year. This helps OPTrust track any changes that could affect the Plan’s funded status – and explore alternatives for prudently managing any funding loss.

Because of the drop in world’s stock markets in 2001 and 2002, the OPSEU Pension Plan has lost money. However, returns are robust in 2003 and the funds of the OPSEU Pension Plan are soundly managed.

It is still too soon to predict the results of the Plan’s next formal funding valuation and the impact of market swings. Any shortfall would normally be made up through higher member and employer contributions. However, OPSEU and the Government of Ontario have each set aside separate contribution stabilization funds that can be used to reduce or delay a contribution increase.

For pensioners, though, the bottom line is simple: a funding loss will have no impact on the value of your OPTrust pension and you will still get annual inflation increases. You can depend on your OPTrust pension.

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You Asked …Your T4A Slip

In late January, OPTrust will send T4A slips (or NR4 slips for non-residents) to all OPTrust pensioners. The T4A is a Statement of Pension, Retirement, Annuity and Other Income. It is issued by a pension plan administrator, such as OPTrust, and reflects the pension income you received from a pension source.

Your T4A shows the pension income you received from OPTrust during the previous year as well as taxes and other deductions OPTrust has withheld. The information on the T4A must be reported to the Canada Customs and Revenue Agency when you file your income tax return in the spring.

If you don’t receive your T4A or NR4 slip by the end of February, please contact our Member and Pensioners Services staff.

Below are some commonly asked questions to assist you in understanding your T4A slip.

Question: What is “other income” in Box 28?
Answer: If applicable, other income includes the premiums for the basic life insurance policy. Your former employer, on your behalf, pays these premiums to Great-West Life as part of your pension benefits. Any insurance premiums paid by an employer are considered “taxable benefits.” As a result, these premiums are treated as income and you must pay any applicable income tax on them. Please note that this applies only to life insurance premiums, not all benefit premiums.

Question: What does the pension amount in Box 16 represent?
Answer: It represents your pension taxable income from OPTrust. The pension amount represented in Box 16 is your gross pension income for the year, before deductions. The gross amount must be reported to the Canada Customs and Revenue Agency.

Your gross pension income should be easy to verify since it is usually a fixed amount and generally does not change during the year.

If you retired before 2003:
Gross monthly pension x 12 = annual figure

If you retired after the start of 2003:
Gross monthly pension x
number of months since you became a pensioner
= annual figure

If you receive retroactive payments, the gross retroactive amount (before deductions) must be added to the annual figure to calculate your income for the year. Retroactive payments are taxed in the year you received them.

The amount you receive in your bank account every month is your net income – the amount payable to you after deductions. Deductions from your gross pension amount may include items such as income tax, and premiums for supplementary life insurance, vision care and hearing aid plan coverage. For more information refer to the Pensioner Information Change Statement article.

Question: What is “other income” in Box 28?
Answer: If applicable, other income includes the premiums for the basic life insurance policy. Your former employer, on your behalf, pays these premiums to Great-West Life as part of your pension benefits. Any insurance premiums paid by an employer are considered “taxable benefits.” As a result, these premiums are treated as income and you must pay any applicable income tax on them. Please note that this applies only to life insurance premiums, not all benefit premiums.

Question: Are there any special income tax allowances for pensioners?
Answer: Yes. All pensioners can claim for pension income. The non-refundable tax credit amount is up to $1,000 and is reported on line 314 of your income tax return. The actual amount allowed by the Canada Customs and Revenue Agency is the lesser of $1,000 and the pension reported in Box 16 of the T4A you received.

Additionally, any pensioner who turned 65 on or before December 31, 2003 is allowed a maximum age federal tax credit of $3,787. The amount is determined by your income. If your income is $28,193 or less you can claim the whole age credit. If you have an income greater than $28,193 you will have a portion of the tax credit “clawed back.” If you have an income over $53,440, you do not qualify for the age credit. The age credit is entered on line 301 of your income tax return.

Pensioners may be able to claim a number of other credit amounts. If you prepare your own tax return, we suggest that you review all the nonrefundable tax credit amounts (line 300-307) on your return to ensure you claim the maximum credits allowable.

Question: What is the TD1 form?
Answer: The TD1 form is the Personal Tax Credits Return. There are two TD1 forms - initially completed when individuals have a new employer or when they start receiving a pension. The TD1 informs your pension administrator (or employer) of your tax credits, thereby reducing the tax deductions made at source on your income (pension or earnings).

You are not required to fill out either the provincial or federal TD1 form every year. It is only required if you expect a change in your personal tax credits or your marital status.

Note: In February, you will have access to change and print your TD1 tax information through Secure Online Services.

Question: Is it possible to increase the tax amount being deducted from my pension payment?
Answer: Yes, but you must make this request. Under Canada’s Income Tax Act, your pension payments are considered taxable income. This means that each month, OPTrust must withhold certain income tax from your pension payment. This deduction is paid directly to the Canada Customs and Revenue Agency on your behalf.

We only withhold the required amount of income tax based on the OPTrust pension unless you ask us to withhold an additional amount. We do not withhold income tax for any other sources of income, such as CPP or an investment income. Each payer withholds income tax based on the amount that is being paid. However, the income tax amount due at year-end is based on the total income from all sources.

If you would like additional income tax deducted from your pension, please complete a Personal Information Change Request form. Note: In February, you will have the option to automatically increase the income tax deducted from your pension by using Secure Online Services, available on the OPTrust Web site.

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OPSEU’s Retired Members Division

Were you an active member of OPSEU? Did you know that even though you are retired you can still be involved by joining OPSEU’s Retired Members Division?

There is a onetime fee of $10 for a lifetime membership to OPSEU’s Retired Members Division, which allows you to follow what’s going on in the Union and participate in activities geared towards retirees.

In 1981, three former OPSEU members launched the Retired Members Division to provide an outlet for retired members to remain involved in Union activities. Since then, the organization has grown to over 2,000 members with seven Regional Executive Committees and a Provincial Divisional Executive Committee.

OPSEU’s Retired Members Division exists to:

• bring together retired members to discuss current issues;
• inform retired members of OPSEU’s programs, policies and objectives;
• advance common interests of this division;
• formulate recommendations for self-help or for action by the Union;
• assist active OPSEU members prepare for retirement;
• foster ties with similar organizations; and
• provide members with social and recreational activities.

When you join the Retired Members Division you will receive a personalized kit with a Retired Members Card and Certificate, a retirees pin, the Constitution of the Union and the list of executives.

As a member you will also receive a copy of the quarterly newsletter Autumn View, which features information on health benefits, finances, insurance, Old Age Security and the Canada Pension Plan, helpful tips and more. Members are encouraged to submit articles or letters to be featured in future issues of the Autumn View.

Who can become an OPSEU retired member?
Membership in the Retired Members Division is open to all former OPSEU members who are currently retired from the Ontario Public Service.

How do you join?
Application forms are available from OPSEU Regional Offices, Regional Chairpersons of the Retirees Executive Committees, and OPSEU’s Head Office in Toronto. For more information about the Retired Members Division contact the OPSEU Head Office at 1 (800) 268-7376 ext. 664 or visit their Web site at www.opseu.org.

Note: OPSEU is a sponsor of OPTrust. OPTrust and OPSEU are separate organizations.

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Your 2004 Pension Payment Schedule

Mark your calendars! OPTrust’s pension payment schedule for 2004 is available. Your OPTrust pension is paid on the 26th of each month, except in December when the pension is paid on the 20th. Similar to past years, if the 26th falls on a Saturday or Sunday the pension is paid the previous Friday.

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Retirement Booklet Update

Our booklet Your Pension and Your Retirement has been updated to reflect recent changes to the OPSEU Pension Plan, including the temporary and permanent benefit improvements and the extended contribution reduction implemented as a result of funding gains in the Plan.

The retirement booklet is geared to members who are planning to retire within a few years and OPTrust retirees who are currently receiving a pension from the Plan. For current OPTrust pensioners the booklet explains integration with the Canada Pension Plan at age 65, factors to consider when planning for your survivors and other important matters of interest to pensioners.

Click here to order a print copy of Your Pension and Your Retirement.

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