Option to Contribute During an LOA
Before starting any unpaid LOA of more than one month, the member and employer must complete an Application to Contribute During an Unpaid Leave of Absence (OPTrust1025) form and submit it to OPTrust. This form is used to indicate whether or not the member chooses to make pension contributions during the leave. The OPTrust 1025 form cannot be completed once a member returns to work.
If the OPTrust 1025 is received during the leave, the available payment option will be compressed to fit the leave period. If the leave ends prior to the submission of the OPTrust 1025 then the appropriate information should be submitted on the OPTrust 1036 form.
Contributing During the LOA
If the member chooses to contribute during the LOA, the amount of contributions required from the member and from the employer will depend on the type of leave. Once OPTrust receives the completed 1025 form, we will calculate the member contributions that must be made during the leave period and notify the member of the amount and the available payment options.
For most unpaid leaves of absence, member’s contribution payments during the leave are made directly to OPTrust, either as a lump sum or in a series of installments.
In certain cases, contributions may be paid through payroll deductions:
- For pregnancy, parental or adoption leaves, the member may have the option of having pension contributions deducted from the Supplementary Unemployment Benefit (SUB) paid by the employer.
- For self-funded leave periods, if the member continues to be paid by the employer, pension contributions are to be paid through payroll deductions.
- For leave periods when the member is eligible to receive LTIP benefits, the employer pays both the member and employer contributions.
If the Member Chooses Not to Contribute During the LOA
Members who choose not to make pension contributions during the LOA must still complete and submit the OPTrust 1025 form together with the employer, prior to the start of the leave.
If the member chooses not to contribute, the unpaid leave does not interrupt his or her plan membership. However, the member will not receive pension credit for the leave period. On returning to work, the member may be eligible to buy back credit for the period of the LOA, subject to the Plan’s normal buyback rules. For more information, please see the Employer Manual section on Buybacks.
ITA Limits on Credit for LOAs
The Income Tax Act imposes limits on the total amount of pension credit that members may accrue for leave of absence periods. These limits apply to all leaves occurring after 1990. The total combined credit a member may obtain for post-1990 leaves due to illness, or for special or education purposes is five years.1 Where the leave is due to pregnancy or adoption, the 5-year limit on the total combined credit can be increased by the period of the pregnancy/adoption leaves, to a maximum of 3 additional years.
A part-time employee cannot contribute for more credited service during a leave period than he or she would normally have earned by working during that leave period. For example, if an employee normally works 50% of full-time hours, he or she can only accrue credit at half the rate of a full-time employee during a leave period.
1 OPSEU Pension Plan Text, Article 7.4(10).