November 20, 2009, Number 34
“Surplus Factor 80” provision approved by Plan’s sponsors
OPSEU and the Government of Ontario have approved an amendment to the OPSEU Pension Plan extending the temporary “Surplus Factor 80” option for eligible members in the Ontario Public Service (OPS).
Surplus Factor 80 is an early retirement option that is available to eligible plan members who are permanently laid off. The provision allows eligible members to retire with unreduced OPTrust pensions if their age plus their credit in the Plan total at least 80 years at the time they leave their employment.
The plan amendment also enables employers and bargaining agents for bargaining units outside the OPS to negotiate agreements allowing eligible members to retire under the Surplus Factor 80 provision.
The additional cost to the Plan for the extended Surplus Factor 80 provision will be paid by the Government of Ontario. For bargaining units outside the OPS, if the parties agree to eligibility criteria that differ from those in effect in the OPS, the employer will be responsible for any additional actuarial cost to the Plan.
Surplus Factor 80 in the OPS
The Surplus Factor 80 provision has been amended to reflect negotiated changes to the OPS Central Collective Agreement that were ratified by OPSEU and the Government of Ontario effective February 26, 2009.
Under the amended Surplus Factor 80, plan members in the OPS may qualify for an unreduced pension if:
- they are laid off under the Central Collective Agreement before January 1, 2013
- their age plus their credit in the Plan total at least 80 years before January 1, 2013, and
- their age plus credit total at least 80 years on the date their employment ends.
Important: Under the amended Surplus Factor 80 provision for the OPS, the employer’s designated representative(s) must provide OPTrust with written confirmation that the member applying for a pension under Surplus Factor 80 has been laid off pursuant to the job security provisions of the Central Collective Agreement.*
*Note: OPTrust is not responsible for administering the Central Collective Agreement. The application of the job security provisions under this agreement is a matter between the OPS bargaining units and the employer.
OPTrust Retirement Checklist Updated
We have revised the OPTrust Employer Retirement Checklist (OPTrust 1072) to ensure we receive the documentation needed to process retirements under the Surplus Factor 80 provision.
When submitting the documentation for a member’s Surplus Factor 80 retirement, the employer’s representative should:
- check the box indicating that the member has been laid off pursuant to the job security provisions of the applicable collective agreement
- sign and date the checklist
- forward the signed checklist to OPTrust with the Termination of Membership (OPTrust 1012) form and other required documents.
Employer representatives for the Ontario Public Service and for employers non-OPS bargaining units should use the Employer Retirement Checklist for all Surplus Factor 80 retirements. The updated checklist is available in the Employer section of OPTrust website at: www.optrust.com. For more information, please see our online Employer Manual.
Retroactivity in the OPS
The Plan amendment also allows eligible members in the OPS who received a notice of layoff before February 26, 2009, to qualify for an unreduced pension under Surplus Factor 80.
In these cases, members may qualify if their employment is terminated in accordance with the notice of layoff and their age plus credit in the plan total at least 80 years before 2013 and on the date their employment ends.
OPTrust has expedited the processing of unreduced pensions for members and former members who are eligible for an unreduced pension under these transitional provisions.
Surplus Factor 80 for non-OPS bargaining units
For members of other bargaining units outside the Ontario Public Service, employers and bargaining agents may negotiate agreements to provide for retirement for eligible members under the Surplus Factor 80 provision.
In these cases, the parties must jointly notify OPTrust and both sponsors of the terms of any such agreement.
As in the OPS, such agreements must specify that eligibility for a pension under Surplus Factor 80 is limited to members who are laid off after exhausting all other job security provisions provided for in their collective agreements. We recommend that employers contact OPTrust’s Policy Unit in advance to verify that a proposed Surplus Factor 80 agreement meets this criterion.
Where the parties agree to eligibility criteria that differ from those in effect for the Surplus Factor 80 provision in the OPS, the employer will be required to pay the Plan for any additional actuarial cost.
Once such a provision is in effect, non-OPS employers should provide a signed copy of the OPTrust Employer Checklist for Retirements when submitting a Surplus Factor 80 retirement case. See box above for more details.
Plan members who receive a notice of layoff may also be able to “bridge” to an unreduced pension.
As with Surplus Factor 80, bridging requires special provisions in the members’ collective agreement. These provisions allow laid-off members to use leaves of absence, the surplus notice period and the period represented by their severance payments to extend their pensionable employment to reach the earliest date on which they would otherwise qualify for an unreduced pension.
Eligible members can use bridging to qualify for a pension under the Plan’s Factor 90 (age + credit = 90 years) or 60/20 (age 60, 20 years of credit) early retirement options.
Where the necessary agreements are in place, bridging can also be used to qualify for a pension under Surplus Factor 80. In this case, members must meet the eligibility criteria for Surplus Factor 80 in effect for their bargaining units.
In the OPS, eligible members can use bridging to qualify for an unreduced pension under Surplus Factor 80, Factor 90 or 60/20.
For more information
Employer representatives and plan members who have questions about the Surplus Factor 80 provision should contact OPTrust’s Member and Pensioner Services.
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