Missed Mandatory Contributions
Employers are required to remit pension contributions to OPTrust for all Plan members. This includes contributions for all pensionable earnings as well as for temporary part-time work arrangements, and certain leaves of absence (LOA) where contributions are mandatory under the Employment Standards Act.
Required contributions for regular, temporary part-time work arrangement or LOA service that are not remitted to OPTrust are referred to as “missed mandatory contributions”.
Note! If OPTrust identifies a period of service for which missed mandatory contributions are owed, we will notify the employer of the amount due, including applicable interest. If the required contributions are not remitted on time, additional interest will be calculated. For more information, please see missed mandatory contributions in the Procedures section.
Causes of Missed Mandatory Contributions
Situations that commonly result in missed mandatory contributions include the following:
1) Administrative Error
- The employer did not commence contribution deductions from the member’s payroll effective as of the plan membership date (PMD). The contributions commenced after the PMD, and no catch-up of contributions was made for the missed period.
- The employer failed to remit contributions for a particular period when the member was receiving pensionable earnings. Therefore, pension contributions are insufficient to support the pensionable earnings for the period.
- The employer remitted contributions to the wrong plan, either to the Ontario Pension Board or another Plan in error.
2) Salary Increase
- Retro Salary – Pension contributions were not deducted on retro salary increases as a result of a grievance settlement or reclassification of job position resulting in a higher salary.
- Top-Up Salary – The member received top-up salary and no contributions were deducted for the top-up salary portion. The employer is responsible for both employee and employer contributions for the top-up portion.
3) Leave of Absence (LOA)
- An LOA (paid or unpaid) that was less than 30 days and member did not make pension contributions for the period of the leave.
- Maternity Leave of Absence (MAT LOA) when the member elected to make contributions from sub-allowance and no contributions were submitted for the LOA period.
- MAT LOA commencing January 1, 1999 for which the member did not make an election not to contribute. Contributions for periods of statutory pregnancy and parental leaves are deemed to be mandatory under the Employment Standards Act.
4) Temporary Part-time Work Arrangement
- A temporary part-time work arrangement when the member elected to make contributions based on their regular hours during the arrangement and full contributions were not submitted for the arrangement.
- A temporary part-time work arrangement where the member did not make an election or where the employer did not submit the Temporary Part-time Work Arrangement Contribution/Buyback Application (OPTrust 1030) form to OPTrust. During a temporary part-time work arrangement, contributions must continue based on the member’s regular hours unless the member elects in writing to contribute on their reduced hours only during the arrangement.
5) Pension Bridging
- When a member has been granted a leave of absence with pay pursuant to a bridging benefit and no contributions were submitted for the bridging period.
6) Long-Term Income Protection (LTIP)
- If the member was on LTIP and contributions are missing for periods prior to 1990. All post 1990 LTIP contributions are based on a salary escalation factor; prior to 1990, contributions are calculated based on the employees’ actual salary rate.
The employer is required to remit both the member and employer share of missed mandatory in-service contributions for the following reasons:
- The plan text requires the employer to remit all mandatory contributions. Deduction and remittance of contributions on all pensionable salary are the responsibility of the employer.
- The plan text requires contributions to be remitted within 15 days of credit accrual. Credit accrual is immediate at the Trust for mandatory contribution cases.
- Taxation and T4 implications for regular pension contributions are the responsibility of the employer. Therefore, the member may not remit funds for the missed mandatory period directly to OPTrust.