OPSEU extends pension plan gains to
The OPSEU Executive Board has decided to extend recent
improvements to the OPSEU Pension Plan to divested members.
On December 1, 2002, a package of temporary and permanent improvements to
the Plan came into effect for active members, and current and deferred
pensioners. OPSEU’s recent decision will extend these benefit improvements
to members who have been divested from the Plan. The package of improvements
was selected by OPSEU in its role as a Plan sponsor, and is to be paid for
from the members’ and pensioners’ $467 million share of gains in the OPSEU
The benefit changes affecting divested members will require an amendment to
the text of the OPSEU Pension Plan. This amendment must be signed by both
Plan sponsors – OPSEU and the Government of Ontario – and filed with the
regulatory authorities before OPTrust can administer these enhanced
benefits. As a result, we will not be able to respond to individual
inquiries from affected divested members until the amendment is filed.
The benefit changes that will apply to divested members include:
- The extension of the temporary Factor 80 early
retirement option to March 31, 2005.
- The extension of the temporary “points off” program
for members over 55 who choose to retire early with a reduced pension, to
December 31, 2005. Under this program, the member’s pension reduction will
be based on how many years he or she is from eligibility for an unreduced
pension under one of the Plan’s permanent unreduced retirement options: these
include Factor 90, the 60/20 option or normal retirement at age 65. Under
the Plan’s normal rules, the reduction is based on how far away they are
from age 65.
- A permanent reduction in the CPP offset to .655%.
This means a smaller reduction to divested members’ OPTrust pensions at
- The elimination of the CPP offset on survivor
pensions prior to the date on which the retiree would have reached age 65.
Survivors of retirees will now be paid at 60% of the pension their spouse
or parent would have received until the date the retiree would have
reached age 65.
Once the required Plan amendment is filed, OPTrust
will send personalized letters to all divested members who will qualify for
Factor 80 before June 30, 2003. This letter will include the members’
anticipated Factor 80 eligibility date and an estimate of their pension
amount. After that time, Factor 80 dates will be shown on Annual Pension
If you qualified for Factor 80 between November 1, 2002 and now, you are
required to end your membership in the pension plan within 184 days of the
end of the month in which you reached Factor 80.
|For example: if you are a divested
member who reached Factor 80 on December 12, 2002 you must leave
your employment by July 4, 2003. You would receive your first
pension cheque in August 2003.
The $467 million represents the members’ and
pensioners’ unallocated share of funding gains realized by the Plan from
1999 – 2001. OPSEU has also allocated a portion of the members’ share of
gains to an extended contribution holiday for active members. An additional
$146 million was set aside to stabilize member contributions in the future.
In total, the Plan experienced gains of $867 million for the period, which
are shared between the Government of Ontario and the members and pensioners.
The Government of Ontario has placed its share of gains in a Government of
Ontario stabilization fund.
Updates on the extension of gains-related benefit improvements to divested
members will be posted on the OPTrust Web site as soon as additional
information is available. Divested members are urged to keep their address
up-to-date at OPTrust so they can receive important information from their