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Pensions are considered income and as such are subject to income tax. As part
of your retirement package we ask you to complete two TD1 forms, one federal
and one provincial form. Unless you inform us otherwise, we only deduct based
on your OPTrust pension income. If you are collecting CPP and OAS and have
other income, you may be in a higher tax bracket, but unless you provide that
information on your TD1, we don't know and can't deduct additional money. This
could lead to tax owing and even tax penalties.
If you qualify for benefits, your former employer pays most of the cost for
your insured benefit premiums. You pay a small portion of the premium if you
want vision care and hearing aid plan coverage. If you choose only medical and
dental coverage you will pay no premium at all. You may elect vision and
hearing aid plan coverage and cancel it later. However, once you cancel
coverage, it cannot be reinstated. You cannot elect in and out of the benefit
plan.
It is your responsibility to provide OPTrust with the necessary paperwork if
you have a requirement to pay from your pension payment for either spousal or
child support payments. Family support is one of two types of third party
demands that we will deduct from your pension. If we receive a court order or
domestic contract we will deduct the specified amount from your pension.
Canada Revenue Agency is the other third party demand that we will deduct from
your pension. If you have a requirement to pay, we need to have the
documentation sent to us by Canada Revenue Agency in order to make the
deduction. We do not have access to your employer’s records and cannot use that
requirement in our administration.
While you are receiving your pension, it is exempt from most creditors. The
exceptions are Canada Revenue Agency, your former spouse in the case of a
spousal relationship breakdown and orders for child support. If you die after
retirement and do not have an eligible spouse, eligible children or a named
payment recipient, payments made to your estate can be claimed by creditors.
Retirement Calculator
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