It's Your Pension

If you are under age 55

If you are under age 55, you can:

• choose a deferred pension (which means leaving your pension entitlement with OPTrust and having the right to a pension from OPTrust in the future),

• transfer the commuted value of your pension to another retirement savings arrangement such as a locked-in retirement account (LIRA) (see below for more information on),

• transfer your pension service to another pension plan under a reciprocal transfer agreement (see our fact sheet Transferring Your OPTrust Pension to Another Pension Plan for more details), or

• use the commuted value of your pension to purchase a deferred life annuity, subject to the requirements of the Pension Benefits Act.

If you are age 55 or older

If you are 55 or older, the commuted value of your pension cannot be transferred out of the Plan because you are entitled to receive an immediate pension. If you are not eligible for an unreduced early retirement provision when your employment ends you may choose to start your pension at any time between the ages of 55 and 65, however, your pension amount will be subject to an early age-reduction (for more information on the age-reduced early retirement provision).

Your pension is payable without early age-reduction at age 65. If you choose to delay the start of your pension beyond age 65, there will be no actuarial increase.

You may also be able to transfer your pension service to another pension plan under a reciprocal transfer agreement. This is different from a commuted value payout.

For more information on the available options, refer to the OPTrust fact sheet Pension Options When Your Employment Ends.

Grow-in rights

You may qualify for grow-in rights under the Pension Benefits Act, if you are a contributing or a divested former member who has been involuntarily terminated without cause on or after July 1, 2012 and meet certain eligibility requirements.

Your employer must inform OPTrust and complete the Grow-in Rights Certification (OPTrust 3013) form. See the fact sheet Grow-In Benefits and Your Pension, for more information.

Divestment situations

If you are subject to a divestment (see definition here), the Pension Benefits Act imposes certain obligations and restrictions on your pension benefits, on the OPSEU Pension Plan and the pension plan of your new (successor) employer.

These obligations may provide protections regarding entitlement to early unreduced retirement. As a result of these requirements, you are not entitled to termination rights until you end your employment with the new employer.

If your new employer does not have a registered pension plan or only has a group RRSP, you are entitled to the termination rights described above.

In some situations when there is a divestment or change in employer, employees who are members of the OPSEU Pension Plan and who move to the “successor” employer in conjunction with the divestment or change of employer may be grandfathered. “Grandfathered” means that the affected employees are allowed to continue to contribute to the OPSEU Pension Plan and to accrue benefits until their termination or retirement from the successor employer.

Each divestment case has to be examined to determine how the Pension Benefits Act applies.

Shortened life expectancy

If you are diagnosed at any age with a medical condition resulting in a life expectancy of less than 24 months, you may apply to transfer the lump sum value of your pension out of the Plan. This applies whether you are active, deferred or retired. Members who are participating in the Plan or are entitled to a deferred pension will receive the commuted value of their pension. Retired members will receive four months of pension payments plus the commuted value of the spousal survivor pension, if applicable.

To qualify, a statement from a medical doctor confirming your life expectancy is required. If you have a spouse, they will be required to waive their right to survivor benefits.

If you qualify, the lump sum value of your pension will be paid to you in cash less withholding tax. Alternatively, you may elect to transfer it to your RRSP on a tax-sheltered basis. The maximum transfer limits under the Income Tax Act may apply.

Refund or excess pension contributions

Under the Pension Benefits Act, members may not contribute more than 50 per cent of the commuted value of their pension for service after 1986. When OPTrust calculates the commuted value of your pension at termination of membership, we determine if the total of your contributions plus interest exceeds one half of the commuted value after 1986. If so, you are refunded the difference. For example: let’s assume you end your membership in the Plan and we determine the commuted value of your pension benefit to be $80,000. Assume you have made contributions of $45,000 including interest. Fifty percent of $80,000 is $40,000. In this case you would have an “excess” of $5,000, which OPTrust would refund to you in addition to your pension benefit valued at $80,000.

This refund is payable in cash, and is subject to withholding tax. In some cases you may be able to transfer it to an RRSP, in which case it is not subject to tax.

Retirement options

If you leave your money with OPTrust and choose a deferred pension entitlement, you receive a deferred pension letter as proof of your deferred status. The letter indicates that you are entitled to a pension, normally payable at age 65, from OPTrust. You also have the option of an early age-reduced pension payable as early as age 55.

Inflation protection

After your termination date, under the current plan terms, a cost-of-living adjustment is applied annually each January to your deferred pension. The adjustment is intended to provide protection from inflation while you wait for your deferred pension payment to start. OPTrust sends a statement to deferred former members every year to inform them of the cost-of-living adjustment.

Rejoining the OPSEU pension plan

If you return to work for an employer who participates in the OPSEU Pension Plan, and you rejoin the Plan, your pension service from all membership periods is joined. You will have to pay back any refund for excess pension contributions you may have received.

Joining from the PSPP

If you joined the OPSEU Pension Plan and had a deferred pension from the PSPP, your pension service in the PSPP is not automatically added to your pension service in the OPSEU Pension Plan. If you have a deferred pension from the PSPP and want information on moving your prior pension service to the OPSEU Pension Plan, please contact OPTrust for more information. You have the option of joining the pension service or leaving it separate, however, time limits apply.

Joining another public sector pension plan

There are deadlines for transferring your pension service and we can inform you of the terms or any costs that may be involved. Be sure to read over the separate transfer section.

Taking the commuted value up to age 55

Under the current plan terms you can choose to transfer the commuted value of your deferred pension to another retirement arrangement at any time before you turn 55. The commuted value of your pension will change depending on your age and the current market conditions (e.g. interest rate) at the time of the withdrawal from the fund. The amount you can transfer is subject to the maximum transfer limits under the Income Tax Act. If the transferred amount exceeds the maximum transfer limits, the balance will be paid to you in cash, less withholding tax. In limited circumstances, you can transfer the excess amount to your RRSP.

Providing a survivor pension for your spouse

Under the current plan terms, if you had a spouse when you ended your membership in the Plan and you have the same spouse when your pension begins, OPTrust pays for a 60 per cent survivor pension at no cost to you, if your spouse meets the eligibility requirements.

Paying for the spousal survivor pension

For divested members, to be eligible for a survivor pension paid by OPTrust, your spouse must have been your spouse at the date of your divestment, at termination and when your pension begins.

Your pension will be reduced to pay the 60 per cent survivor benefit if:

• your spouse at retirement was not also your spouse at the time you terminated your membership in the Plan, or

• for divested members, your spouse at retirement was not also your spouse at the time of your divestment and at the time you terminated your membership in the Plan.

If you do not want to provide this benefit, you and your spouse may waive it, in which case your spouse will not receive survivor benefits when you die. To waive the survivor benefit, you and your spouse must complete the applicable waiver form, Form 3 - Waiver of Joint and Survivor Pension, available on the FSRA website. The waiver is not effective unless the form is signed, dated and received by OPTrust within 12 months before your pension begins.

To ensure that the person you intend to receive any survivor benefits actually receives the benefits, it is critical that you are aware of how an "eligible spouse" is defined in the Plan and in the Pension Benefits Act and that you keep OPTrust informed of any changes to your spousal/common-law status. See the definition of "eligible spouse".

Note: Make sure OPTrust knows who your spouse is and that you have submitted the necessary documents, particularly if the relationship is common-law.