Buyback Deductions

Currently, under the OPSEU Pension Plan, members may have the option of making buyback contribution payments through a series of payroll deductions. Buyback contributions made through payroll deduction are tracked and reported using one of two methods:

1) OPTrust-Administered Deductions

OPTrust currently administers buyback contribution deductions for OPS employers that are part of the WIN system. Under this method, OPTrust generates a deduction file (known as the “DS file”) based on members’ open buybacks and submits this file to be run against the WIN payroll system. The deduction is either completely satisfied or no deduction is taken (this applies to both the member and employer deduction). The employer does not need to track or administer any portion of the buyback.

Deduction Methodology:

Deductions are requested for all members with active buybacks regardless of their current employment status (Active, on leave or Terminated). If the member is not paid for the period in question, no deduction will be taken. OPTrust will then follow up with the member directly to confirm his or her status and arrange for a catch up payment or the recalculation of the remaining payments.Terminated members will be removed from subsequent requests.

While this method is designed for the WIN payroll system, the OPTrust-administered deduction file can be modified to meet other system requirements. Please contact OPTrust’s Data Management Group for futher details.

Data Management Group

The Data Management Group (DMG) is responsible for service, contribution and payroll data submitted by employers.

Contact DMG by email: EmployerService@optrust.com

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Codes

Only three deduction codes are required to identify buyback contributions.

  • 054 is used for buybacks where the employee is paying both shares of the cost (i.e. special or an educational leave)
  • 055 is used for buybacks where the employee is paying their share of the cost (i.e. Non-Contributory buyback)
  • 056 is used for buybacks where the employer is "matching" the cost of the employee (i.e. Non-Contributory buyback).

A "matched" buyback does not necessarily mean that the cost for the employee and the employer are the same, as the cost is calculated based on the member and employer contribution rates in effect for the period of service purchased.

2) Employer-Administered Deductions

Employers that are not part of the WIN system currently use this method for administering buyback contribution payroll deductions. Under this method, OPTrust provides the employer with directions regarding the deduction of member and employer contributions via the OPTrust 1016 form or a secure Employer Site message. These contributions are reported as part of the biweekly data file. The payment schedule established by OPTrust must be adhered to throughout the lifetime of the buyback. Any change may adversely affect the member's credit accrual. Employers should not stop the deductions unless a member has terminated, transferred, retired or died.

Members must contact OPTrust directly to change deduction amount.