<< PREVIOUS PAGE   |   NEXT PAGE >>

What is your pension benefit?

VESTING: YOUR RIGHT TO A PENSION

Under the OPSEU Pension Plan, the normal retirement age is 65. If you have at least two years of credit or continuous membership in the Plan, you are entitled to receive a pension at age 65 based on your credit. If you have this right to a pension, you are "vested." You do not have a vested right to a pension if you have less than two years of credit and continuous membership. If you are not vested when you leave the Plan, you will receive a refund of your contributions plus interest. If you are 65 and are not vested when you leave the Plan, generally you will receive two times your contributions, plus interest.

If you are a vested member of the pension plan, you may be eligible for additional early retirement benefits, or additional choices when you leave the Plan before retirement.

THE BASIC FEATURES OF YOUR PENSION BENEFIT

The basic pension you accrue in the OPSEU Pension Plan:

• is based on i) the average annual salary rates for the five consecutive years that produce
• the highest average and ii) accrued pensionable service credit
• is paid for your lifetime
• is adjusted for inflation on an annual basis
• may be paid early without penalty if you qualify for early retirement options
• contains a survivor pension component for your eligible spouse and/or children.

How Your OPTrust Pension is Calculated

Your OPTrust pension has two components – a lifetime retirement pension benefit, plus a bridge benefit if you retire before age 65. Both components of your pension are indexed for inflation.

If you retire before age 65 you are also entitled to a bridge benefit until you reach age 65. This temporary benefit helps level your pension income until age 65 when you can collect a CPP pension. When you retire at age 65, you will start to receive your lifetime retirement pension benefit only.

The OPTrust bridge will not be the same amount as your CPP benefit and we will continue to pay the bridge benefit until you reach 65 even if you decide to collect your CPP penson at age 60.

CALCULATING YOUR OPTRUST LIFETIME PENSION

2 % × (a × b) - (c × d) = lifetime pension a = your best five-year average annual salary b = your credit c = OPTrust bridge benefit reduction at age 65 0.655% × the lesser of: your best average annual salary and your final five-year average Year's Maximum Pensionable Earnings (YMPE) under the CPP d = your credit after 1965 (to a maximum of 35 years)

Your average annual salary is the average of your highest consecutive five-year annual salary rates during your membership. The average YMPE under the Canada Pension Plan is the amount set by the Canada Pension Plan for the year your membership in the OPSEU Pension Plan ends and the four preceding years.

Example

Let’s assume you are 65 years old and retired on August 31, 2007,
with the following:

Average annual salary: $47,000

Credit: 20 years

Average Year’s Maximum Pensionable Earnings (YMPE):

2007	$43,700
2006	$42,100
2005	$41,100
2004	$40,500
2003	$39,900
	$207,300	÷ 5 = $41,260

Using the basic pension formula, your retirement pension would be calculated as follows:

.02 x $47,000 x 20 years	=	$18,800
minus OPTrust bridge benefits until age 65:
.00655 x $41,460 x 20 years	=	$5,431
Gross annual benefit effective September 1, 2007	=	$13,369

To calculate the bridge benefit, we use the lesser of the average YMPE and the average annual salary. In this example, because the average YMPE ($41,460) is less than the average annual salary ($47,000), the average YMPE is used to calculate the bridge benefit.

<< PREVIOUS PAGE   |   NEXT PAGE >>