Quick Facts about Your Pension
Welcome to the OPSEU Pension Plan. You are now part of a defined benefit
pension plan which means you will receive a retirement pension based on a
formula that takes into account your salary and years of pension service. This
fact sheet provides you with information on how your pension can influence
your financial landscape.
TAXABLE INCOME
• You contribute approximately 10% of your regular salary to the Plan. You do
not make pension contributions on overtime pay and bonuses.
• Contributions to the Plan are not taxed.
• When you start receiving your monthly pension, you will pay income tax on
that retirement income.
HOW PENSION CONTRIBUTIONS AFFECT RRSP ROOM
• Canada Revenue Agency (CRA) rules determine your annual Pension Adjustment
(PA) amount. This PA reduces your RRSP contribution room. The PA amount is the
estimated value of your pension and is not equal to your contributions to the Plan.
• If you buy back prior service in the Plan your RRSP room may be reduced.
In this case, OPTrust files a Past Service Pension Adjustment (PSPA) with CRA.
P
lease refer to the Buying Back Pension Service section of our website for
more information.
.......................................................................................................................................................................................................................................................................................................
Fact Sheet
QUICK FACTS ABOUT
YOUR PENSION
JANUARY 2017
IN THIS FACT SHEET
• Increasing your pension
• What will I get when I retire?
• How does my pension fit with
my investment strategy?
• Pension statement
• Online resources
• If you leave your employment
before retirement
• Survivor benefits in the Plan
• When can I retire?
INCREASING YOUR PENSION
While you are working, you can increase your pension
service if:
1you transfer in pension service from another pension
plan, or buy back service for a period when you did not
contribute to the Plan (e.g. contract, leave of absence,
etc.).
For more information, see the fact sheets on transferring in
service and buying back pension service in the publications
section of our website at optrust.com. Pension service is
accrued based on the percentage of time you work. For
example, if you work part time one half of full time each
year, you accrue 50%, or six months of pension service.
2your salary increases. Your pension entitlement is based on
the average of your best five consecutive years of salary.
This chart gives an
idea what someone
who retired in 2017 on
an unreduced pension
would receive.
HIGHEST
AVERAGE
SALARY
BEFORE
AGE 65
YEARS OF PENSION SERVICE
2025 30
$40,000$16,000 $20,000 $24,000
$50,000$20,000 $25,000 $30,000
$60,000$24,000 $30,000 $36,000
$70,000$28,000 $35,000 $42,000
AT AGE 65
$40,000$10,760 $13,450 $16,140
$50,000$13,450 $16,813 $20,175
$60,000$16,994 $21,243 $25,491
$70,000$20,994 $26,243 $31,491
All numbers have been rounded to the nearest dollar.
2
The calculation of your pension is based on a formula which takes into
account your pension service and salary. Please refer to the It’s Your Pension
booklet on our website for details on the pension formula.
Under current plan terms, your pension is paid for your lifetime and it is
adjusted annually for inflation.
If you retire before age 65, the OPSEU Pension Plan provides you with a CPP
bridge benefit until the month in which you turn 65.
For example, for a member whose highest five-year average salary is $60,000
and has 20 years of pension service in 2017, the benefit would look like this:
+
CPP bridge: $7,006
Pension: $
16,994
TOTAL ANNUAL PENSION UNTIL
AGE 65 IS $24,000
Pension: $
16,994
+ CPP pension
and OAS
PENSION FROM AGE 65
ONWARDS
HOW DOES MY PENSION FIT WITH
MY INVESTMENT STRATEGY?
Most financial planners will tell you that you need approximately
60% to 80% of your pre-retirement income to maintain your preretirement lifestyle. In combination with your expected income from
CPP and OAS, consider what remaining income replacement you
require, how to best use your remaining RRSP room and whether you
require a tax free savings account (TFSA) in retirement.
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................................................................................................................................................................................................................................................
WHAT WILL I GET WHEN I RETIRE?
ONLINE RESOURCES
OPTrust offers a wealth of
online resources at optrust.com
for everything you need to
know about OPTrust at your
fingertips.
While online take a look at our
other social media channels to
learn more about your pension
and the OPSEU Pension Plan.
All active and deferred members
receive a personalized Annual
Pension Statement by June 30
which covers the previous year.
The statement shows the growth
of your pension and your future
pension entitlement.
3
IF YOU LEAVE YOUR
EMPLOYMENT BEFORE
RETIREMENT
If you are under the age of 55
you can:
• transfer the value of your
pension to an RRSP or to your
new employer’s pension plan
(reciprocal agreements must be
in place)
• leave (defer) the pension with
OPTrust and start to draw it
when you are eligible
• use the commuted value of
your pension to buy a deferred
life annuity, subject to the
requirements of the Pension
Benefits Act.
SURVIVOR BENEFITS IN THE PLAN
In the event of your death, under the current terms of the Plan,
your eligible spouse will receive survivor benefits.
• Death before retirement: your spouse has the choice of taking either
the full value of the pension benefit you were entitled to receive taken
as a pension or as a lump sum.
If you do not have an eligible spouse, a lump sum payment will be split
among all your named beneficiaries.
• Death after retirement: your spouse receives an indexed survivor
pension that is 60% of what you were receiving, for his or her lifetime.
If you do not have an eligible spouse, a residual lump sum balance
(if any) is split among your named beneficiaries.
Lump sum payments taken as cash are subject to withholding tax.
Additional details regarding death benefits can be found on our website,
in the fact sheet Your Pension Beneficiaries.
Once you turn 55 you are no
longer able to transfer your
entitlement out of the Plan.
For more information on options at
termination please refer to the fact
sheet Pension options when your
employment ends available on
our website.
WHEN CAN I RETIRE?
The normal retirement age from the OPSEU Pension Plan is 65, however
there are early retirement options for long serving members based on
service and age.
Please refer to the It’s Your Pension booklet on our website for details on
how to qualify for early retirement.
FOR MORE INFORMATION
PLEASE CONTACT OPTRUST
HOW TO
REACH US
The Plan is governed by a Plan text and contains numerous
provisions not described here that may apply to you. In the event
of any conflict between this Fact Sheet and the OPSEU Pension
Plan text, the Plan text will govern.
OPSEU Pension Trust
1 Adelaide Street East, Suite 1200
Toronto, ON M5C 3A7
OPSEU Pension Trust
Fiducie du régime de
retraite du SEFPO
Member Services
Tel: 416 681-6100 in Toronto
1 800 637-0024 toll-free in Canada
Fax: 416 681-6175
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