Tax Deduction and Receipting

There are two types of member contributions that the employer remits to the OPTrust. “Regular” contributions are deducted from the member’s pensionable salary and past service “Buyback” deductions are optional payments of prior service.

In all cases, a regular payroll contribution is a before tax deduction. As a before tax deduction, the taxable income is reduced at source. No tax receipt is required from the Plan for this deduction. However, the employer must report these contributions and the associated Pension Adjustment (PA) on the member’s T4.

As for past service buyback deductions, the tax implications differ between WIN and the Agencies, Boards, and Commissions (ABC’s). In the case of member buyback deductions through WIN (the Ontario Public Service payroll system) the deductions are completely managed by the OPTrust and are taken as an after tax deduction. As such, the OPTrust will issue a tax receipt at year-end. 

icon Important! OPS Employers:  As the payroll buyback processing and its associated receipting is handled completely by the OPTrust, the employer should never use the OPTrust Buyback GTN codes for deductions of any kind.

Buyback deductions taken from members that are employed by an ABC are managed separately by each employer. It is the responsibility of the employer to report any deductions along with the associated PA.

Any lump sum or ongoing buyback payment received directly by the OPTrust from the member will be reported by the OPTrust.