For OPSEU Pension Plan members who work in the Ontario Public Service, the OPSEU strike that took place between March 13 and May 5, 2002 raises a number of important questions about the strike’s impact on their pensions. The following frequently asked questions and answers are provided for general information.

• Strike Periods and Your Pension Credit
• Buying Back Credit for the Recent OPSEU Strike
• Effect of the Strike on Other Buybacks
• Effect of the Strike on Early Retirement
• Effect of the Strike on Leaves of Absence (LOAs) and Long Term Income Protection (LTIP)
• Answers for Pensioners
  

1. Does going on strike affect my pension credit?

Yes. Members normally earn credit for periods of contributory service. When you are on strike, your employer does not pay you and no pension contributions are made on your behalf. That means you do not earn pension credit while you are on strike.

An exception to this general rule has been made for members who lost credit due to the recent OPSEU strike and who retire on or before October 31, 2002. Under the "Return to Work Protocol" between OPSEU and the Government of Ontario, these members will receive credit for any service missed due to the strike, at no cost to themselves. (See Question 6, below.)

2. Why does pension credit matter?

Your pension credit matters in several ways:

• It is a key factor in calculating the amount of your OPTrust pension. The more credit you accrue, the higher your pension will be when you retire.
• It is used in determining your eligibility for OPTrust’s unreduced early retirement options, including Factor 80, Factor 90 and the 60/20 option.
• It is used in determining your eligibility for post-retirement health and dental benefits, paid for by your employer.

3. If I worked during the strike, will I receive pension credit?

If you worked during the strike – under an essential services agreement, for example – your employer deducted pension contributions for the time you worked. This means that you earned pension credit for the period you worked.

4. Can I buy back the credit I missed due to the strike?

Yes. The OPSEU Pension Plan allows members to buy back credit for strike periods after they return to work.

This summer, OPTrust will send a letter to the homes of all members who missed pension credit due to the recent OPSEU strike. This letter will provide each member with a quote for the cost of buying back the credit missed as a result of the strike. The letter will also explain the available payment options. Payment options will include:

• a one-time payroll deduction, to be taken from your pay on November 21, 2002, or
• a single, lump-sum payment, to be made by cheque and sent directly to OPTrust.

The member’s cost for purchasing strike service is relatively small. For example, the cost for a member who earns $43,000 per year and who was away from work for the whole 54-day strike period is approximately $160. As a result, members will not have the option of spreading the cost of the strike-related buyback over a number of payments.

If you have moved recently or are planning to move in the future, please be sure to notify OPTrust of your change of address to ensure you receive your buyback letter and other important information about your pension.

5. How do you calculate the cost of buying back credit for the strike period?

Your share of the cost for your buyback is based on:

1. the number of days you were off work due to the strike
2. your salary rate in effect as of May 6, 2002 (including any salary increases resulting from the new collective agreement), and
3. the member contribution rate in effect during the strike period.

As your employer, the Government of Ontario will also be paying a share of the cost of credit purchased as a result of the recent OPSEU strike. The employer’s share of this cost is calculated using the normal employer contribution rate under the Plan. The employer contribution rate is currently higher than the member rate, due to a reduction in the member rate, in effect until November 30, 2002.

6. I am planning to retire by October 31, 2002. Do I need to buy back the credit I missed during the strike?

No. Under the Return to Work Protocol between OPSEU and the Government of Ontario, any member who retires on or before October 31, 2002 will receive credit for any service missed due to the strike, at no cost to the member. This applies to members who retire at Age 65, under the Factor 80, Factor 90, 60/20 provisions, or with a reduced pension, provided their retirement date no later than October 31, 2002. For these members, the Government of Ontario has agreed to pay both the member’s and the employer’s cost for purchasing this service.

More information on the Return to Work Protocol is available on the OPSEU Web site (www.opseu.org) or by contacting your human resources representative.

7. Will it make a difference if I decide not to buy back credit for the strike?

Yes. If you decide not to buy back credit for the strike period, this will reduce the amount of your pension when you retire. Not purchasing past pension credit could also affect your eligibility date under the Plan's early retirement options (Factor 80, Factor 90 and 60/20), and your ability to qualify for post-retirement health and dental benefits paid for by your employer.

Note: If you are planning to retire on or before October 31, 2002, you do not have to pay to buy back credit for the recent OPSEU strike. (See Question 6, above.)

8. What if I already have a buyback in progress? Can I combine the strike period with my existing buyback?

No. Under the Plan’s buyback rules, the strike is treated as a separate period of service. Therefore, you cannot combine your payments for the strike period with any other buyback payments you may be making.

9. I have been making payments for a previous buyback through payroll deductions. Were my payments affected when I was on strike?

Yes. Because during the strike, whether you were paid or not, all buyback payments made through payroll deduction were suspended. With the end of the strike, your payroll deductions have re-started at your previous payment amount. However, to complete your buyback, you will also need to make up your missed payments.

In June, OPTrust will send a letter to the homes of all members whose buyback payments were interrupted due to the OPSEU strike. This letter will provide each member with a quote for the amount of the missed payments and explain the member’s payment options. To make up the missed payments members will have two options:

1. make a single lump sum "catch-up" payment to OPTrust by cheque, or
2. have their remaining payments re-amortized to include the missed payments, starting with their October 2002 pay.

If you choose to have your payments re-amortized, an additional interest charge will apply. You will not have to pay any additional interest if you make a lump-sum payment by the due date.

If you have moved recently or are planning to move in the future, please be sure to notify OPTrust of your change of address to ensure you receive your buyback letter and other important information about your pension.

10. Has Factor 80 been extended beyond March 31, 2002?

Yes. Under a recent amendment to the OPSEU Pension Plan, the window for qualifying for the voluntary Factor 80 option has been extended to October 31, 2002. The new window applies retroactively to April 1, 2002. OPTrust will send a letter to the homes of all members whose OPTrust records indicate that they may qualify for Factor 80 between April 1 and October 31, 2002.

To retire under the Factor 80 option, you must meet important time limits. If you think you may qualify under the new Factor 80 window, please contact OPTrust as soon as possible. For more information please see OPTrust’s Update on Factor 80.

A related "Surplus Factor 80" provision has also been extended. This provision allows members to retire with an unreduced pension if they:

1. have reached Factor 80, or have already passed their Factor 80 retirement window, and
2. receive a surplus notice from their employer before January 1, 2005.

For more information, please see OPTrust’s Update on Factor 80.

11. If I qualified for Factor 80 prior to the strike, will the strike affect my ability to retire?

No. If you qualified for Factor 80 before the strike (i.e. your age plus your credited service equal 80) your Factor 80 retirement will not be affected. However, you must still meet the time limits for submitting your notice to your employer and retiring under the Factor 80 provision. Under the Return to Work Protocol, you will receive credit for the strike period, and your pension amount will be unaffected, provided you retire on or before October 31, 2002. (See Question 6, above.)

Important: Please contact OPTrust Client Services at 416- 681-6100 or 1-800-637-0024 to confirm your eligibility for Factor 80 before notifying your employer that you plan to retire.

12. I expected to reach my Factor 80 date between March 13 and March 31, 2002. Will the strike affect my ability to retire under Factor 80?

No. Under the Return to Work Protocol, if you retire on or before October 31, 2002, you will receive credit for the strike period at no cost. (See Question 6, above.) As a result, if you expected to qualify for Factor 80 between March 13 and March 31, 2002, your Factor 80-eligibility date – and your deadlines for submitting your resignation notice to your employer and resigning – will be unaffected by the strike.

Important: Please contact OPTrust Client Services at 416- 681-6100 or 1-800-637-0024 to confirm your eligibility for Factor 80 before notifying your employer that you plan to retire.

13. With the extension of Factor 80, I would normally have qualified between April 1 and
October 31, 2002. Will the strike affect my ability to retire under Factor 80?

Possibly. Under the Return to Work Protocol, your ability to retire under Factor 80 and your pension amount will be unaffected by the strike if:

1. you would normally have qualified for Factor 80 between April 1 and October 31, 2002, and
2. you choose to retire before October 31, 2002.

As well, the deadlines for submitting your resignation notice to your employer and resigning will be unaffected. (If you reached Factor 80 in April 2002, the time limit for submitting the resignation notice has been extended by one month, to August 31, 2002.)

If you would normally have qualified for Factor 80 before October 31, 2002, but chose not to retire until after October 31, 2002, you will have the option of buying back credit for the strike period before your retirement date. If you do not buy back credit for the strike period, your Factor 80-eligibility date may be delayed or you may be unable to qualify before the end of the October 31 window.

Important: Please contact OPTrust Client Services (at 416- 681-6100 or 1-800-637-0024) to confirm your eligibility for Factor 80 before notifying your employer that you plan to retire.

14. What happens if I qualified for a pension under Factor 90 or 60/20 during the strike?

Eligibility for the Factor 90 and 60/20 early retirement options is based on meeting the respective age and service qualifications. Neither of these provisions is based on a time-limited window.

Under the Return to Work Protocol if you elect to retire before October 31, 2002, you will receive credit for the strike period at no cost to you. Therefore, your eligibility to retire under Factor 90 or 60/20 will not be affected by the strike.

If you chose not to retire until after October 31, 2002, you will have the option of purchasing credit for the strike period before your retirement date or having your pension amount reduced to reflect the missing strike service.

15. Will the strike affect my ability to qualify for early retirement under Factor 80, Factor 90 or 60/20 in the future?

Possibly. Eligibility for temporary early retirement options such as Factor 80 is based on meeting age and service qualifications within certain time limits. As a result, if you are missing credit due to the strike, this could affect your ability to qualify for any such early retirement options that may come into effect in the future. Eligibility for the permanent Factor 90 and 60/20 options is not based on a time-limited window. However, since these provisions are based on a member’s age and service, if you are missing credit due to the strike, your future eligibility for these early retirement options could be delayed.

If you become eligible for one of these early retirement provisions and retire before October 31, 2002, you will receive credit for the strike period at no cost, under the Return to Work Protocol. For more information, please contact OPTrust Client Services.

If you expect to qualify a future early retirement provision, buying back credit for the strike period will allow you to ensure that the strike will not affect your eligibility or the amount of your pension. (See Questions 4-8, above.) If you choose not to buy back credit for the strike period, your eligibility for one or more of the Plan’s early retirement provisions may be affected, or your eligibility date may be delayed.

16. Under the new collective agreement, if I receive layoff notice, can I still use leaves of absence to "bridge" to an unreduced pension?

Yes. The OPSEU Pension Plan includes a provision that allows members who receive a notice of layoff to "bridge" to the nearest unreduced early retirement date that they may qualify for (Factor 90, 60/20, Age 65, or Factor 80 if attained before January 2005, if applicable). "Bridging" means using leaves of absence, the surplus notice period and the period represented by severance payments to qualify for an unreduced OPTrust pension.

Bridging requires specific language in your collective agreement allowing for pension contributions during the severance period and/or the use of leaves of absence for bridging purposes. The new Central Collective Agreement between OPSEU and the Government of Ontario contains language allowing members to access the bridging provision.

17. I was on an approved leave of absence without pay. Do I have to buy back the strike time?

You do not have to buy back the strike separately if

1. you were on an approved leave of absence without pay for illness (including WSIB), pregnancy or parental leave, or special or educational purposes, and
2. your leave began before the strike and ended after the strike.

This is because you already had an agreement with your employer to be away from work for that period. The normal 24-month buyback application deadline and costing rules will apply to the entire leave period. When you return to work you can apply to purchase credit for the period of your leave

However, if the date of your return to work fell within the strike period and you joined the strike, you will lose pension credit for any service you missed due to the strike. You will have the opportunity to buy back credit for the strike period, separately from any buyback for your leave of absence. (See Questions 4-8, above.)

18. I was on pregnancy/parental leave during the strike, but my SUB allowance was interrupted. Do I have to buy back the strike time?

Under the Return to Work Protocol your SUB allowance for the strike period will be paid retroactively. If you had arranged to have pension contributions deducted from your SUB allowance prior to the strike, your contributions for the strike period will be deducted from your retroactive SUB payment. As a result, you will not have to buy back credit for the strike period.

If you were not having pension contributions deducted from your SUB allowance, you will have the option of purchasing credit for the whole period of your pregnancy/parental leave under the Plan’s normal buyback rules. (See Question 17, above.)

19. I was approved for Long Term Income Protection (LTIP) before the strike. Do I have to buy back the strike time?

If you were on LTIP before the strike and did not return to work until after the strike, your pension credit will not be affected. While you are on LTIP, your employer is responsible for paying your share of the contributions, as well as theirs.

Answers for OPTrust Pensioners

20. Was OPTrust affected by the strike?
No. OPTrust is not part of the Ontario Public Service, and our operations were unaffected by the OPSEU strike. The strike did not cause any interruption to your pension payments or the processing of new retirements or other transactions.

21. Did the strike have any impact on my pension?
The outcome of the strike may affect your pension if you retired on or after January 1, 2002. Any increase in the salary for your job classification that is retroactive to January 1, 2002 will affect the average annual salary used to calculate your pension amount.

If this applies to you, OPTrust will recalculate your pension amount to reflect any retroactive salary increase. Your pension increase will be retroactive to your date of retirement. Because your average annual salary is based on your best average annual salary over five consecutive years, the increase to your pension is likely to be quite small.

It may take several months for OPTrust to receive the new salary data and recalculate your pension. We expect to complete this work by the end of 2002, and will send a statement detailing the amount of any change to all OPTrust retirees whose pensions are affected.

In addition, pension contributions will be deducted from any retroactive salary payment you receive from your former employer under the new collective agreement.

The above information applies only to OPTrust pensioners who retired on or after January 1, 2002 and who are covered by the Central Collective Agreement between OPSEU and the Government of Ontario. The pensions of other OPTrust pensioners are unaffected by the recent strike.

22. Did the strike affect the insured benefits provided by the Government of Ontario?
Yes. The Government of Ontario has informed us that under the new Central Collective Agreement between OPSEU and the Government, there have been changes to the insured benefits provided to members of the Ontario Public Service. These changes will also apply to eligible pensioners who receive post-retirement health and dental coverage through Great-West Life. For example, out-of-country prescription drugs are no longer covered.

These insured benefits are provided by the Government of Ontario – not OPTrust. OPTrust has been informed that the changes to post-retirement insured benefits will be effective as of June 1, 2002.

In the near future, we will be sending you more detailed information from the Government of Ontario on the changes to your post-retirement health and dental benefit coverage. We will also provide more information in an upcoming issue of The Pension Connection, our newsletter for OPTrust pensioners.

For additional information, please contact OPTrust Client Services at (416) 681-6100 in Toronto or
1- 800-637- 0024, toll-free in Canada.