Working After Retirement
When a retired member who is receiving a pension from OPTrust returns to work, there may be an impact on his or her pension, depending on the amount of his or her earnings and whether the employer contributes to the OPSEU Pension Plan.
- If the employer does not contribute to the OPSEU Pension Plan for any of its employees, the retiree’s pension is not affected.
- If the member is re-employed by an employer who contributes to the Plan for any of its employees, the impact on the member’s pension depends on the salary earned, and whether or not the member re-joins the Plan.
Without Plan Membership
If an OPTrust retiree is re-employed by an employer who contributes to the Plan, but chooses not to re-join the Plan, his or her monthly pension is subject to an earnings ceiling each calendar quarter.
The earnings ceiling is determined by adding the total of the member’s pension income plus the re-employment earnings for the quarter. This amount should not exceed the member’s final pre-retirement quarterly earnings based on the final salary rate. If the total income in any calendar quarter after retirement is more than the quarterly employment earnings before retirement, OPTrust will reduce the member’s pension by the amount in excess of the pre-retirement earnings. If this reduction is greater than the pension amount paid in the same period, only the pension amount paid will be recovered.
With Plan Membership
Depending on the nature of the re-employment and the retiree’s age, he or she may have the option to re-join the OPSEU Pension Plan. If the pensioner re-joins the Plan, his or her pension stops immediately. The additional contributions made to the Plan as a result of the re-employment will accrue additional credit. When the employment ends, the pension will be recalculated to include this additional credit. If the re-employed pensioner originally retired with an early reduced pension, the pension recalculation will be actuarially adjusted to take into account any pension payments already paid.
Reporting Re-Employment Earnings
It is the re-employed pensioner’s responsibility to inform the new employer that he or she is currently in receipt of a pension from OPTrust. The employer is then responsible for completing the Pensioner’s Quarterly Re-employment Earnings and Calculations Report (OPTrust 1008) every calendar quarter, and forwarding to OPTrust.
Note! Re-Employed Salary: The salary that should be reported on the OPTust1008 is the earnings paid to the re-employed pensioner on pay dates that fall within the calendar quarter and is not to be applied to the quarter in which the pay periods fall. The earnings reported should include all payments identified as part of the Plan’s definition of pensionable salary.
Example: If Jane Doe worked for the following pay period:
- Pay Period Start: August 29, 2016
- Pay Period End Date: September 11, 2016
- Pay Date: October 6, 2016
These earnings would be reported as part of the fourth quarter report even though the period that the salary was earned was in the third quarter.
Note! Retroactive Salary: When a retroactive payment is awarded to a reemployed pensioner, the earnings are also to be reported in the period in which the earnings were paid, not the period for which it was earned.
Example: John Doe, an OPSEU Pension Plan pensioner, is reemployed with the ministry and receives a $4,200 retroactive salary increase. The details of the transaction are as follows:
- January 01, 2013 to December 31, 2013: $1400.00
- January 01, 2014 to December 31, 2014: $1500.00
- January 01, 2015 to November 22, 2015: $1300.00
The retroactive earnings were paid to Mr. Doe on January 14, 2016. Therefore, these earnings form part of the first quarter, 2016 earnings. OPTrust will recalculate Mr. Doe’s pension as well as his new earnings ceiling.