Toronto (February 1, 2010) – OPSEU and the Government of Ontario have approved a new “open option” buyback. This change to the Plan’s rules allows eligible members to buy back credit after the Plan’s normal 24-month application deadline has expired.
As of February 1, 2010, members can apply to buy back credit for eligible periods of past service, even after the 24-month application deadline. Under the new option, members can also apply for a previous buyback that was not completed within in the 10-year, three month payment window.
How does an open option buyback work?
An open option buyback gives members who did not apply within the normal 24-month window the flexibility to complete a buyback. OPTrust now accepts applications from members:
- for leaves of absences that ended more than 24-months before the application date
- who did not apply within 24-months of their most recent plan membership date to purchase non-contributory service (e.g. contract service)
- for service with other registered public sector pension plans
The new open option buyback gives members an opportunity to secure a pension benefit that was previously out of reach. Eligible members may be closer to one of the Plan’s early retirement options (Factor 90 or 60/20) and they would likely see an increase to their OPTrust pension at retirement.
How much will it cost?
The cost for an open option buyback is calculated on an “actuarial” basis. As a result, the cost may be considerably higher for members who applied outside the Plan’s normal 24-month application window.
To calculate the actuarial cost, OPTrust uses a number of factors – such as the member’s age and current salary rate, current interest rates, and the amount of service he or she is purchasing – to determine the current cost of the additional pension the member will receive if he or she completes the purchase.
For more information
Employer representatives and plan members who have questions about the new buyback rule should read our fact sheet Open Option Buyback or contact OPTrust’s Member and Pensioner Services by phone or e-mail.