OPSEU extends pension plan gains to divested membersPosted: February 20, 2003
February 20, 2003
Gains for divested members now in effect
OPTrust now has the go ahead to process gains improvements for divested members. By February 28, 2003 all divested members who will qualify for Factor 80 before June 30, 2003 will receive a package which will include the members' anticipated Factor 80 eligibility date and an estimate of his/her pension amount. After that time, Factor 80 dates will be shown on Annual Pension Statements, as with all members.
The benefit changes that 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 divested members over 55 who choose to retire early with a reduced pension, to December 31, 2005. Under this program, the divested 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 he/she is 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.
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. Please contact us immediately if you think you qualified for Factor 80 during this time and have not received a letter from us.
The OPSEU Executive Board decided to extend recent
improvements to the OPSEU Pension Plan to divested members earlier this year.
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 required an amendment to the text of the OPSEU Pension Plan. This amendment had to be signed by both Plan sponsors - OPSEU and the Government of Ontario - and filed with the regulatory authorities before OPTrust could administer these enhanced benefits. The amendment has been signed by both sponsors and has been filed.
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.
Read this for more information on the improvements in
the OPSEU Pension Plan.
Does OPTrust have your current address?
Divested members are urged to keep their address up-to-date at OPTrust so they can receive important information from their pension plan.