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Employer Update Issue 48 | Spring 2017

 

People for Pensions

At OPTrust, we are pension people and believe strongly in the value of the defined benefit (DB) pension model.

But not everyone is aware of the value DB pensions deliver to workers, employers, the economy and Ontario communities, and the long-term social and economic benefits of ensuring retirement income security for all Canadians. We’ve launched our People for Pensions program to spread the word about the positive aspects of DB pensions from the pension people that matter most: our membership.

OPTrust’s People for Pensions program is designed to create an informed, educated and connected community among our members and retirees to promote the DB pension model. The program will ask our membership to become a People for Pensions member to share information with their peers, friends and families about the value of DB plans like the OPSEU Pension Plan.

QUESTIONS AND ANSWERS
What is People for Pensions?

People for Pensions is a voluntary participation program for members, retirees and employers of the OPSEU Pension Plan who want to learn more about the positive aspects of DB pension plans and share that information with colleagues, family and friends.

Why did OPTrust create the program?

The People for Pensions program is one of several OPTrust initiatives intended to raise awareness about the value of DB pension plans. Research has shown that members and retirees of the OPSEU Pension Plan place a high value on their pensions, but are sometimes not aware of the value of having a DB plan versus other kinds of retirement savings vehicles. The People for Pensions program provides members, retirees and employers of the Plan with information they can share with their peers, friends and families about the value of DB plans like the OPSEU Pension Plan, and how the DB model helps to support the economy.

People for Pensions homepage
Why should someone in the workplace become a People for Pensions member?

The OPSEU Pension Plan is an important part of an employee’s workplace compensation package. Misconceptions about public service pension plans exist. The information provided by the People for Pensions program will assist in clarifying these.

As an employer, what role do I play in this program?

There is no formal role or expectation of employers regarding the People for Pensions program. All information about the program is provided by OPTrust. Questions from employees regarding the program can be directed to Melissa Bruno, Public Affairs Specialist and People for Pensions Community Lead at peopleforpensions@optrust.com or 1 800 906-7738 ext. 3052.

How does someone become part of the People for Pensions program?

There’s a simple online form at peopleforpensions.com. Alternatively, employers and employees can get in touch with Melissa Bruno, the program’s Community Lead, at peopleforpensions@optrust.com.

Who can be a People for Pensions member?

Any active member of the OPSEU Pension Plan can be a People for Pensions member. Retirees who are drawing a pension from the OPSEU Pension Plan and members who are entitled to a future pension can also become a member of the program.

People for Pensions page
How will People for Pensions members get information about pension issues?

OPTrust communicates its People for Pensions program through a variety of ways: the peopleforpensions.com website, an e-newsletter, as well as through social media channels like Facebook and Twitter. The Community Lead from OPTrust will also make several workplace presentations across the province.

As an employer, can I sign up to get the same information as my employees?

Yes. Simply sign up at peopleforpensions.com and we will add you to our e-newsletter list.

 

If an employer has any questions or concerns about the People for Pensions program, who should they contact?

Melissa Bruno

Community Lead
People for Pensions
peopleforpensions@optrust.com
1 800 906-7738 ext. 3052

 

 

Woman doing presentation

In 2016, OPTrust launched a new half-day workshop for employers to meet OPTrust staff and other pension and benefits professionals who work with OPTrust. The workshop provides an opportunity to:

  • Discuss pertinent employer issues.
  • Get your questions answered.
  • Learn about other services provided by OPTrust.
  • Provide feedback on what OPTrust can do for you.

Your feedback helped to shape the workshop content and format.

OPTrust will be rolling out additional sessions in 2017. Stay tuned for information on upcoming sessions. If you have not attended a session and are interested in attending one, please call or send a secure message to your OPTrust contact through Online Services.

 

 

Session expires

In support of online security, OPTrust has added a reminder message after a period of inactivity when on the secure Online Services site. The message offers you the choice to keep the site open and continue your session, or to cancel your session.

Remember to always use the log out button, located at the top of the Online Services web page. It’s a good practice on any secure website.

 

 

 

 

You have another way to connect with OPTrust and learn more about your pension plan with Twitter. OPTrust is in the Twitterverse with the handle @OPTrust.

We are tweeting insights on retirement, pension and investment news, and more. If you have a Twitter account follow us, retweet our news and stay connected. While online take a look at our other social media channels, including our newly launched Facebook page, together with optrust.com for everything you need to know about OPTrust at your fingertips.

 

 

Woman using laptop

Members have the option of continuing to contribute to the Plan while on an unpaid leave of more than one month due to illness. This includes periods where the member’s absence from work is related to an approved claim under the Workplace Safety and Insurance Board (WSIB) and has been approved by the employer as a leave of absence for purposes of WSIB.

For these leaves, both the member and the employer pay a portion of the cost if the member chooses to continue contributing.

The cost to the member equals the contributions he or she would have paid if the leave had not been taken. This cost is based on:

  • OPTrust’s member contribution rate in effect during the period of the leave
  • the member’s salary rate at the beginning of the leave, plus escalation where the leave spans more than one calendar year
  • the member’s normal rate of credit accrual (i.e. at the ratio of scheduled hours worked to regular full time employment for the position).

The cost is calculated using the same formula as the member’s buyback cost for non-contributory service with an employer that contributes to the Plan.

The employer’s cost is also based on the employer contributions that would have been paid had the member continued working. This is calculated using the formula for the employer’s buyback cost for non-contributory service with an employer that contributes to the Plan.

Different rules apply when members are approved for Long Term Income Protection (LTIP). See the Employer Manual for more details about remitting contributions for members who have been approved for LTIP.

 

LEAVES WHILE ON WSIB
  • When a member is on an approved WSIB leave of absence, the effect on his or her pension contributions and credit depends on the phase of the WSIB leave period.
  • During the phase when the member is paid by the employer, the employer will continue to deduct contributions automatically, and the member will accrue credit at his or her normal rate.
  • During the phase when the member is paid directly by WSIB, he or she has the option of paying contributions to OPTrust or not. As with other leaves due to illness, the member and employer must complete and submit the OPTrust 1025 form. The member and employer costs are calculated in the same way as for other illness leaves.
  • If the member is paid directly by WSIB, but is eligible for or qualified to receive payment under the employer’s Long Term Income Protection (LTIP) plan, the member is considered to be on LTIP for pension purposes. The employer is responsible for remitting both the employer and employee contributions for the entire period that the member qualifies for LTIP. Contributions are based on the contribution rates in effect during the period, the member’s pre-injury or pre-illness salary rate, plus escalation for each subsequent calendar year, and the member’s pre-injury or pre-illness credit accrual rate (i.e. the ratio of scheduled hours worked to regular full time employment for the position).

 

 

 

WHAT ARE GROW-IN RIGHTS?

With this benefit terminating members/divested former members can “grow into” and start an unreduced early retirement pension on the date the former member would have been eligible for Factor 90 or 60/20 had his or her employment continued to that date. The member’s pension entitlement is calculated based only on the credit earned in the OPSEU Pension Plan to the date of termination.

HOW DOES A MEMBER BECOME ELIGIBLE FOR GROW-IN RIGHTS?

To qualify for grow-in rights a member must meet the following conditions:

  • He or she has been involuntarily terminated without cause by his or her employer.
  • His or her termination date of membership or termination date with the successor employer is on or after July 1, 2012.
  • His or her age plus years of continuous service, membership or pension service equals at least 55 points on the termination date.
  • He or she is under 65.
  • On his or her termination date, he or she is not eligible for an early unreduced pension under the Factor 90 or 60/20 provision of the Plan. However, he or she would become eligible before his or her 65th birthday if his or her employment had continued.

The employer must inform OPTrust by completing a Grow-In Rights Certification (OPTrust 3013) form. All pension entitlements with a termination date before July 1, 2012 are not eligible for grow-in rights.

Section 74 of the Pension Benefits Act (Ontario) specifies what is meant by involuntary termination for grow-in purposes. It is the employer’s responsibility to comply with all legal requirements associated with any terminations.

 

HOW DO GROW-IN RIGHTS WORK?

If a terminated member would have become eligible for an early unreduced pension under the Factor 90 or 60/20 provision of the Plan before his or her 65th birthday had his or her employment and Plan membership continued uninterrupted to that date, the member can:

  • Defer his or her pension and have it start on the date he or she would have been eligible for an unreduced pension.
  • Defer his or her pension and have it start the month following his or her 65th birthday.
  • If under age 55, he or she can transfer out the commuted value of his or her pension. Grow-in rights will be taken into account in the calculation of the commuted value.