LOAs and Pension Credit
For pension purposes, leaves of absence can be divided into three broad categories. Only some of these leaves have an impact on a member’s pension credit and/or contributions.
1. Leaves of Absence with Pay
Normally, leaves of absence with pay have no impact on a member’s pension. During an LOA with pay, the member continues to receive his or her regular salary while he or she is absent from work. For these leaves, both the employer and the member continue to make regular pension contributions to OPTrust, and the member continues to accrue pension credit at the normal rate.
2. Leaves of Absence without Pay – Less than One Month
Unpaid leaves of absence lasting less than one month also have no impact on the member’s pension credit. When a member takes an LOA without pay for less than one month, both the employer and the member must make regular pension contributions for the period of the leave. Normally, the employer deducts the amount of contributions that the member would have paid if no leave had been taken from the member’s salary when he or she returns to work and salary resumes.
3. Leave of Absence without Pay - More than One Month
Unpaid leaves of absence of more than one month do affect a member’s pension. For these leaves, contributions are not automatically made to the Plan during the member’s absence from work and the member does not receive pension credit for any leave period for which contributions are not made.
For leaves that are approved by the employer, the member may elect to contribute to the Plan during the period of the leave, using OPTrust’s Application to Contribute During an Unpaid Leave of Absence (OPTrust 1025) form. This applies to unpaid leaves of more than one month, including:
- leaves due to illness, including approved leaves relating to periods when the member receives benefits from the Workplace Safety and Insurance Board (WSIB)
- pregnancy, parental or adoption leaves
- leaves for special or educational reasons
- caregiver leave.
Special rules apply for periods where a member is eligible to receive benefits under the employer’s Long Term Income Protection (LTIP) plan.
Each of these types of leave – and the cost to the member and employer should the member decide to contribute – is discussed in more detail in this section.
Note! If the member chooses not to contribute during an unpaid LOA, he or she may be eligible to buy back credit for the leave period after returning to work. For more information, please see the Employer Manual section on Buybacks.