Joining the OPSEU Pension Plan
How could pension credit change while
you are a member?
As a member of the OPSEU Pension Plan you may be eligible to purchase, or buy back, credit in the Plan for any of the following:
- non-credited government service with the Ontario Public Service or any employer contributing to the OPSEU Pension Plan, the PSPP or its predecessor plan. This service includes periods of employment during which no contributions were made to the Plan (typically contract or unclassified employment) and periods of employment for which contributions were previously refunded. You can also apply to buy back credit for periods when you are on strike or locked out, once you return to work.
- prior non-OPS employment with an employer who did not contribute to the Plan, but who offered employees a registered pension plan in Canada. During the period of employment, you must have been a member of that prior employer’s pension plan. For periods before 1992, you must still have credit in your prior plan for the service you are purchasing and you must transfer the funds directly to the OPSEU Pension Plan. To be eligible to buy back credit for periods after 1991, your purchase must be approved by the Canada Revenue Agency.
- leave of absence without pay for more than one month for illness, including WSIB, pregnancy, parental, adoption, special or educational purposes. You may accrue credit for these periods by making contributions to the Plan during the leave or you may apply to buy back these leaves when you return to work.
- open option for any member who did not meet or apply within the
24-month window. You can apply to buyback:
- leaves of absences that ended more than 24 months before the application date
- non-contributory service (e.g. contract service) that you did not apply for within the 24-month application period
- service with other registered public sector pension plans.
Depending on the type of leave, the cost to you may vary. If your leave of absence is for illness (including leaves without pay while receiving Workplace Safety and Insurance Board benefits) or pregnancy/parental/adoption, you pay contributions based on the member pension contribution rate in effect during your leave while your employer pays based on the employer contribution rate. If you buy back a special or educational leave you will pay either two times the member contribution rate or the member plus employer contribution rates. Some purchases of credit may need Canada Revenue Agency approval and/or may reduce your RRSP contribution room. You may wish to contact the Canada Revenue Agency for tax information.
You can transfer funds from your RRSP to buy back any credit.
- The cost of buying back non-credited
government service is
based on this formula:
annual salary rate (at time OPTrust receives complete application*)
employee contribution rate during period you are purchasing
years of prior service being purchased
* See OPTrust’s booklet Your Pension and
Buying Back Credit for detailed information on buybacks. You can also get
this from your human resources representative.
(For example, if your salary is $40,000 per year and you want to buy back one year of noncredited government service, the approximate cost would be $3,760 based on the 2012 contribution rate). When you buy back this type of credit, your contributions are matched by your employer.
- prior non-OPS employment: The cost of
buying back credit for prior non-OPS employment is calculated actuarially.
Factors taken into account in the actuarial calculation include the cost of
the increase in the pension as a result of the purchase and any applicable
early retirement date.
When you purchase credit for prior non-OPS employment, your employer does not make any contributions for this benefit. You pay the full cost. To be eligible to buyback credit for periods after 1991, your purchase must be approved by the Canada Revenue Agency and you may be required to end your participation in your former Plan.
If your former employer has a reciprocal transfer agreement with the OPSEU Pension Plan, you may qualify for a transfer of credit. If you are eligible, it is usually less costly to transfer your credit under a reciprocal agreement than it is to buy back the credit.
- leave of absence without pay: The
contribution formula for a leave of absence is the same as for non-credited
government service and may be matched by your employer. It may be less costly
to make contributions to the Plan during your leave rather than buying back
the credit when you return to work. Your contributions to the Plan are based
on your annual salary rate at the time of your complete application.
Therefore, if you return to work and decide to apply to buy back your credit,
but your salary has increased by the time you do this, the cost will be based
on your new salary rate.
Before you start any unpaid leave longer than one month (including WSIB leaves), you must fill out OPTrust’s Application to Contribute during an Unpaid Leave of Absence form. This form is used to indicate whether or not you want to make contributions during your leave.
- open option buyback: The cost of buying back credit under the open option is calculated actuarially using factors such as the member's age, salary history and amount of credit that will be purchased. The member pays for the full cost of the buyback.
To be eligible to buy back credit, other than the open option buyback, you must submit your application to the OPSEU Pension Trust within 24 months from the later of:
- the date you first become a member of the OPSEU Pension Plan, or of the PSPP (if you were transferred from the PSPP), or
- the last day of the leave of absence you are applying to buy back, or
- the date you join the OPSEU Pension Plan (to transfer your deferred PSPP pension).
Application forms are available on the OPTrust website or from your human resources representative and from OPTrust. You can also file an application using OPTrust’s secure Online Services. There is no obligation to buy back the credit, it’s simply a way to meet the application deadline in case you want to buy back the service at a later date.
Open Option Buyback
If you are considering the open option buyback, you can apply at any time, even if you missed the 24-month deadline for a past service credit purchase.
You can pay for your purchase of credit:
- as a lump sum either by cheque or money order. Your payments must be completed within 10 years and three months from the date of the original agreement, or by the time you retire, whichever is earlier.
- by monthly or quarterly instalment, OPTrust adds interest to the total cost. The minimum biweekly payment is $10, however, each payment must reduce some portion of the initial principle. Other periodic payment arrangements can be made if you are on leave or LTIP.
- through a series of biweekly payroll deductions for buybacks costing more than $500.
- through a combination of lump-sum payments and payroll deductions for
buybacks costing more than $500. This financing option is available only to
full-time and regular employees (not seasonal or casual)
All payments for a purchase of credit must be completed when you end your membership in the Plan. Otherwise your credit will be reduced by the amount for which you did not pay. If you are retiring, your eligibility for early retirement may also be affected.
Long Term Income Protection (LTIP) benefits are provided through your employer. Your human resources or union representative can provide you with more information.
What happens if you qualify for LTIP?
If you qualify for a benefit under LTIP (or equivalent long-term disability plan benefits) and do not resign your employment, your employer is required to make contributions to the Plan on your behalf until you recover, resign your employment, reach age 65 or die (whichever occurs first). LTIP benefits are reduced by the amount of your monthly OPTrust pension if you retire before age 65. This also applies fi you qualify for LTIP, but are paid directly by WSIB.
For pension purposes, if you qualify to receive LTIP, the salary you were earning on the date of your disability is the base rate used for determining both your pension contributions and pension benefit. This "base rate" is adjusted each year based on the inflation adjustment applied to pensions. Look at the section on pensions for more details and the OPTrust fact sheet Long Term Income Protection and Your Pension Contributions. Be sure to read about disability pensions as well.
If retire before age 65, LTIP benefits are reduced by the amount of your monthly OPTrust pension. This reduction continues for as long as you receive benefits from both the Plan and LTIP.
Contact your employer or the LTIP insurance company for complete details.
What happens if you only qualify for WSIB?
If you are paid directly by WSIB and do not qualify for LTIP, you have the option of paying contributions to OPTrust. You must completed the Application to Contribute during an Unpaid Leave of Absence form to advise OPTrust of your choice. If you choose not to contribute, you can apply to buy back the missed credit, subject to the Plan's 24-month application deadline. For more details, refer to our fact sheet,Contributing to Your Pension while on a WSIB Leave.