Long Term Income Protection (LTIP)

icon Note! The procedures for LTIP administration are the responsibility of the employer and are not part of OPTrust’s guidelines. The following material is provided for information purposes only, and does not differentiate between the OPS and other participating employers.

LTIP and Pension Credit

Unlike other unpaid leaves of absence due to illness, periods when a member is receiving or eligible to receive Long-Term Income Protection (LTIP) benefits do not affect his or her pension credit. During these periods, the member continues to accrue credit at his or her normal rate. 

LTIP is a benefit provided by employers whereby, if the member is deemed unfit for work by a qualified physician and approved by the insurance carrier, the member will qualify to receive 66.66% of his or her salary as of the date of disability. A minimum qualifying period of six months applies from the initial date of disability to the LTIP effective date. If the salary for the member increases during this qualifying period it is still the salary at date of disability that determines the earnings while on LTIP. 

In addition to paying the regular employer contributions to OPTrust, the employer also pays the member’s contributions for periods when the member is eligible for or receives LTIP benefits (including any periods of rehabilitative employment). Pension contributions for these periods are based on the 100% salary rate as at the date of disability, not the 66.66% LTIP benefit. During the member’s absence while on LTIP, this salary rate is escalated annually for inflation, in accordance with the OPSEU Pension Plan’s rules.

Pension contributions became part of the LTIP benefit for employees of the government on July 1, 1974 and for employees at Agencies, Boards, and Commissions in January 1985. Not all employees of the government are eligible to receive LTIP benefits. Only classified (permanent), full-time or regular part time employees are eligible to receive LTIP benefits. Contract, seasonal and casual, or “unclassified” employees are not eligible.

The Dupuis Award

The Dupuis award came into effect on June 23, 1989, after a decision by the Grievance Settlement Board. This award ruled that employees who are totally disabled are entitled to pension accruals at no cost to the member provided they are qualified to receive LTIP. Under this award, the employee need not be receiving LTIP benefits to be entitled to accrue pension credit for the affected period or for the employer to be required to pay both the employee and employer contributions.

For more information, please refer to OPTrust’s Employer Update #10 (December 16, 2002).

Salary Escalation

Effective January 1, 1990, Order in Council  693/91 amended the calculation methodology of LTIP salary escalation, contributions and pension benefits. Under the amendment, the salary rates used in the calculation of the pension benefit accrual while the member is in receipt of LTIP should only reflect increases due to inflation. Unlike LTIP salaries prior to 1990, the increases in salary rates due to negotiated settlements are not applicable.

While the rules around the initial salary escalation can become quite complicated, subsequent annual escalations will always take place on January 1st. The initial salary escalation is based on the relationship between: i) the effective date of the member’s current salary rate, ii) the date of member’s disability, iii) and the effective date of the member’s LTIP claim. 

In the Ontario Public Service, pension contributions for LTIP periods are calculated and maintained outside of the regular payroll system by the Finance & Controllership Branch of the Shared Services Bureau (SSB).

important icon Important! Termination while on LTIP: When a member is terminating his or her plan membership while on LTIP, the employer should state “Member on LTIP” in the final salary section of OPTrust's Termination of Membership (OPTrust 1012) form, rather than entering a salary amount. The collective agreement salary for the position may be different from the final salary on LTIP.

important icon Important! Termination from LTIP: The normal retirement age under the OPSEU Pension Plan is 65. When a member on LTIP reaches age 65, a letter will be sent to the member requesting the required documentation and a copy of the letter will be sent to the employer.

Key Information

The following information is required for pension calculations for periods when a member is receiving or eligible to receive LTIP benefits.

  • Date of disability (DOD) – This is usually the member’s last day at work but it may be a prior date if there is an interrupted qualifying period. Insurance carriers now state the DOD on their acceptance letter.
  • LTIP effective date – This is the date on which LTIP benefits commence. This follows the later of i) the completion of the six-month qualifying period from the date of disability, or ii) the expiration of the employee’s short term sickness plan credits. LTIP pension contributions start on the LTIP effective date.
  • Salary at date of disability – This is the annual salary that the employee was earning on the DOD (including any retroactive revisions). The salary reported is the full time equivalent. If the employee is part-time this is recorded in the RPT ratio %. If the member’s salary changes during the qualifying period, it is still the salary at date of disability that is reported.
  • Salary effective date – This is the date that the salary at DOD became effective. For example, it could be the most recent salary revision date, the date of a merit increase, the start date of a temporary assignment, etc.
  • Termination of LTIP pension accruals – This is the last day that the LTIP benefit is payable or the date on which the member’s employment ends, whichever is earlier. For example, when an employee retires but continues to receive LTIP benefits, his or her retirement date is the date on which LTIP pension accrual ends.
  • Termination reason – When the member’s LTIP pension accrual is to end, the employer must provide the reason the accrual should stop. Examples include: return to full-time work, retirement, resignation, or termination of the LTIP benefit by the insurance carrier.

important icon Important! Rehabilitative Employment: If the member is on rehabilitative employment, as approved by the insurance carrier, the employer continues to pay both the employer and member pension contributions for this period.

Financial and Data Reconciliation

The Finance and Controllership Branch of the Shared Services Bureau (SSB) administers all the LTIP pension accruals for members in the Ontario Public Service. Contribution payments are sent to OPTrust every quarter, based on the escalated salary rate in effect at the start of the calendar year. In February, SSB provides OPTrust with data on the escalated salary rate and contributions for the previous calendar year. This information is then loaded into OPTrust’s member database in time for the Annual Pension Statements to be produced.