About the OPSEU Pension Plan
Summary of Plan benefits
The OPSEU Pension Plan provides members with the following benefits:
Pension at age 65
The normal retirement age under the Plan is 65. Vested members – those with two or more years of credit or continuous membership in the Plan – have the right to an unreduced pension at age 65, based on their credit in the Plan and their best average annual salary rate during their membership.
OPTrust’s pension formula – The member’s lifetime annual pension is calculated using the following formula:
2% | |
|---|---|
times | best 60 sequential months average annual salary rate |
times | years of pension service in the Plan |
minus | CPP bridge benefit (a reduction at age 65) |
CPP bridge benefit and CPP integration – If a member retires before age 65, the member is entitled to a bridge benefit from OPTrust until they reach 65. This temporary benefit helps level pension income until the member is 65 and starts collecting a CPP pension.
At 65, the CPP bridge benefit stops, and the member receives the lifetime pension. The reduction is calculated as follows:
0.655% | |
|---|---|
times | the lesser of: i. the member’s best 60 sequential months average annual salary rate or ii. the member’s final five-year average Year’s Maximum Pensionable Earnings (YMPE) under the CPP |
times | the member’s years of credit after 1965 (to a maximum of 35 years) |
Early unreduced pension
Members may also qualify for an early unreduced pension before age 65, based on their age and years of pension service in the Plan. Members who retire under any of these options receive an immediate unreduced pension based on the OPTrust Pension formula, with no reduction for CPP integration until they reach age 65. OPTrust’s early unreduced pension options include:
Factor 90 – the member’s age plus pension service total 90 years or more.
60/20 – the member is at least 60 years old and has 20 or more years of pension service.
Bridging to an unreduced pension
In certain cases, members who receive a layoff notice may also be able to “bridge” to one of the unreduced retirement options above. The bridging option requires a special provision in the member’s collective agreement.
Age-reduced pension
Members who are age 55 or older but are not yet eligible for an immediate unreduced pension have the option of choosing an immediate age-reduced pension.
Deferred pension
Members who terminate from the Plan before age 65 and are not entitled to an immediate unreduced pension have the option of leaving their entitlement in the Plan and receiving a pension on retirement. In addition, members who are moved to other employers in a divestment situation and enrolled in the new employers pension plan may be required by law to accept a deferred pension from the OPSEU Pension Plan in order to protect benefits already earned.
Survivor benefits
Upon the death of a member or retiree, survivor benefits are payable to a surviving eligible spouse, eligible children or other beneficiaries.
Disability pension
A disability pension is available to members with a minimum of 10 years of credit in the Plan who are totally and permanently disabled and meet the criteria as established in the Plan text.
Members who meet the criteria for total and permanent disability but who have less than 10 years of credit may be eligible to receive a special disability refund under the Plan.
In the case of limited life expectancy, provisions exist to access lump-sum payouts, provided spouses waive their survivor pension and have met other conditions.
Inflation protection
Currently, an adjustment to pension benefits for inflation is made annually based on the Consumer Price Index (CPI) to a maximum of 8 per cent in any one year. Where the inflation adjustment exceeds 8 per cent in any one year, the excess is carried forward to any subsequent year when the adjustment is less than 8 per cent. The adjustment is made to both current pensions and the future value of deferred pensions.
Termination payments
Subject to certain restrictions, a member who is less than 55 years of age and who terminates employment may be entitled to transfer the commuted value of their pension and/or a refund of contributions to a registered retirement savings plan or use these funds to purchase a life annuity. Depending on their circumstances, members may also be eligible for a refund of contributions or excess contributions, which may be paid in cash, subject to withholding of income taxes.
Buybacks
Under the current terms of the OPSEU Pension Plan, members may be eligible to purchase – or “buy back” – pension service for eligible periods of past service. Eligible service includes past service with an employer who contributed to the OPSEU Pension Plan, the PSPP or its predecessor, or service with another registered Canadian pension plan. To be eligible, members must submit a buyback application to OPTrust within the Plan’s 24-month time limit. If the Plan's normal 24-month application deadline has expired, the member can obtain a cost quote to purchase their past service through the Plan's open option buyback. For more information, refer to OPTrust's fact sheet Open Option Buyback.
Transfers
On joining the Plan, members may be eligible to transfer pension service earned under another Canadian registered pension plan into the OPSEU Pension Plan. The terms under which such transfers may be made – including eligibility criteria and application time limits – are set out in reciprocal transfer agreements between OPTrust and certain other plans.
A member who terminates employment and membership in the OPSEU Pension Plan may be entitled to transfer the value of their pension to another pension plan if OPTrust has a reciprocal transfer agreement with this plan. In addition, members who do not terminate employment but must move to the Public Service Pension Plan due to a change in bargaining unit status are subject to mandatory transfer arrangements.
Employer roles and responsibilities
In general, the employer has three main responsibilities regarding a member’s pension and the administration of members’ benefits under the OPSEU Pension Plan:
providing clean, accurate and timely data
deducting members’ contribution from their pensionable salaries and remitting member and employer contributions within the prescribed timelines
initiating transactions and other pension activities based on member events
Each section of the Employer Manual will outline the specific responsibilities of the employer as they pertain to each transaction or member event.
OPTrust realizes that the Plan’s provisions and OPTrust’s administrative policies and procedures can be complex and may be subject to change. The Employer Manual will be updated as required to reflect such changes.
Important! Questions from members and retirees: As part of our member-focused service model, OPTrust has assumed direct responsibility for providing members with information about the OPSEU Pension Plan and their own earned benefits and entitlements. Employer representatives should therefore direct members to our Member Services staff for answers to any questions they may have regarding their pensions.