OPSEU extends pension plan gains to divested membersPosted: January 29, 2003
OPSEU extends pension plan gains to divested members
The OPSEU Executive Board has decided to extend recent
improvements to the OPSEU Pension Plan to divested members.
On December 1, 2002, a package of temporary and permanent improvements to the Plan came into effect for active members, and current and deferred pensioners. OPSEU's recent decision will extend these benefit improvements to members who have been divested from the Plan. The package of improvements was selected by OPSEU in its role as a Plan sponsor, and is to be paid for from the members' and pensioners' $467 million share of gains in the OPSEU Pension Plan
The benefit changes affecting divested members will require an amendment to the text of the OPSEU Pension Plan. This amendment must be signed by both Plan sponsors - OPSEU and the Government of Ontario - and filed with the regulatory authorities before OPTrust can administer these enhanced benefits. As a result, we will not be able to respond to individual inquiries from affected divested members until the amendment is filed.
The benefit changes that will apply to divested members include:
- The extension of the temporary Factor 80 early retirement option to March 31, 2005.
- The extension of the temporary “points off” program for members over 55 who choose to retire early with a reduced pension, to December 31, 2005. Under this program, the member's pension reduction will be based on how many years he or she is from eligibility for an unreduced pension under one of the Plan's permanent unreduced retirement options: these include Factor 90, the 60/20 option or normal retirement at age 65. Under the Plan's normal rules, the reduction is based on how far away they are from age 65.
- A permanent reduction in the CPP offset to .655%. This means a smaller reduction to divested members' OPTrust pensions at age 65.
- The elimination of the CPP offset on survivor pensions prior to the date on which the retiree would have reached age 65. Survivors of retirees will now be paid at 60% of the pension their spouse or parent would have received until the date the retiree would have reached age 65.
Once the required Plan amendment is filed, OPTrust
will send personalized letters to all divested members who will qualify for
Factor 80 before June 30, 2003. This letter will include the members'
anticipated Factor 80 eligibility date and an estimate of their pension
amount. After that time, Factor 80 dates will be shown on Annual Pension
If you qualified for Factor 80 between November 1, 2002 and now, you are required to end your membership in the pension plan within 184 days of the end of the month in which you reached Factor 80.
The $467 million represents the members' and
pensioners' unallocated share of funding gains realized by the Plan from
1999 - 2001. OPSEU has also allocated a portion of the members' share of
gains to an extended contribution holiday for active members. An additional
$146 million was set aside to stabilize member contributions in the future.
In total, the Plan experienced gains of $867 million for the period, which are shared between the Government of Ontario and the members and pensioners. The Government of Ontario has placed its share of gains in a Government of Ontario stabilization fund.
Updates on the extension of gains-related benefit improvements to divested members will be posted on the OPTrust Web site as soon as additional information is available. Divested members are urged to keep their address up-to-date at OPTrust so they can receive important information from their pension plan.