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OMERS and financial planning

I’ve been contributing to RRSPs. Why do I need a pension?

A guaranteed stream of retirement income from OMERS will complement your RRSP investments and CPP income.
With an OMERS pension you don’t assume any risk – your pension is guaranteed. With RRSPs, your investment fluctuates with market conditions.
Your employer matches your OMERS contributions, but unless you're in a group RRSP, employers don’t usually match RRSP contributions.

Your OMERS pension reduces your annual allowable RRSP room.
The maximum RRSP limit is:
- 18% of your previous year’s earnings minus your previous year’s Pension Adjustment (PA).
- The PA is the deemed value of lifetime pension you earned during the year.
- Your employer calculates your PA and reports it to the Canada Revenue Agency.
- The Canada Revenue Agency deducts it from your available RRSP room.

Inflation is the percentage increase in the cost of living from year to year.
Over time, inflation erodes the purchasing power of money. What cost $100 in 1984 cost $189 in 2009.
Your OMERS pension is indexed to inflation, to a maximum of 6% per year. (If inflation is greater than 6%, the excess is carried over into subsequent years.)

Think of your retirement income as three pillars. One pillar is your OMERS pension, one is your own RRSPs and savings, and one is government benefits from Canada Pension Plan (CPP) and Old Age Security (OAS).
Opinions vary about how much of your income you should try to replace in retirement. A common number is roughly 2/3 of your gross pre-tax working income, indexed to inflation.
Use the Retirement Income Estimator to help with your retirement planning. It gives you an idea of what your OMERS pension may be. You need your latest OMERS Pension Report or you can estimate the required information.

If you're within five years of retirement, contact OMERS Client Services for a written quote.
Toll-free: 1-800-387-0813 or 416-369-2444.
Fax: 416-369-0920
E-mail: client@omers.com

You may find it helpful to contact a financial planner to discuss your goals, and to help you establish the level of income you would need in retirement.

Plan ahead and start early: it’s never too soon to start planning for retirement.
Have a good idea of how much you will need from your retirement income – not just to cover costs but also to have some fun and do what you would like to do: travel, entertainment, hobbies, and so on.
Learn what you can about RRSPs, investing, the OMERS plan and your options, and government retirement benefits.
Keep your expectations real; why live better in retirement than you do now?

What kind of lifestyle would you like to have in retirement?
When would you like to retire?
Where would you like to live?
If you have a spouse or partner, what are their retirement goals?
Do you want to have money in the bank for emergencies?
Do you want to leave something behind for your heirs?
OMERS retirees regularly participate in a lifestyle survey. Here's what they have to say about being retired.