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Funding and contribution rates

How is the Supplemental Plan funded?

The Supplemental Plan costs (including administration costs) are paid for entirely by participating members and employers; the OMERS Act, 2006 does not permit cross-subsidization of costs of the Supplemental Plan by the Primary Plan. Members cover the cost of member contributions and pay for any service purchases. Employers cover the cost of employer contributions and pay for matching leave period contributions when required (for example, a pregnancy and parental leave a member purchases).

Costs for supplemental benefits may include any related rebound costs identified by the OMERS actuary as affecting the Primary Plan – to avoid any subsidization of supplemental benefits by the Primary Plan.

What are rebound costs (Primary Plan)?

The 2.33% accrual rate benefit may influence (or encourage) a member’s early retirement. This impact on the Primary Plan must be taken into consideration and Primary Plan contribution rates must be adjusted if necessary (i.e. apply rebound costs).

What are the Supplemental Plan contribution rates?   

The following chart outlines the contribution rates for the Supplemental Plan benefits. Contributions for a Supplemental Plan benefit are effective from the coverage start date of the Supplemental Plan benefit.

Contribution rates for Supplemental Plan benefits

Benefit

Members with a normal retirement age of 60

Members with a normal retirement age of 65

Supplemental Plan contribution rate

Primary Plan rebound rate*

Supplemental Plan contribution rate

Primary Plan rebound rate*

2.33% accrual

2.75%

0.2%

2.35%

0.3%

80 Factor
85 Factor

0.95%

none

.75%

none

“Best three” earnings

1.1%

none

.9%

none

“Best four” earnings

0.85%

none

.75%

none

*Only required if the member has the 2.33% Supplemental Plan benefit.

Notes:
  • Employers match member contributions for ongoing service (effective from the coverage start date of the Supplemental Plan benefit).
  • Contributions are deducted from a member’s regular earnings (regular earnings do not include additional amounts such as overtime pay and most one-time, lump-sum payments).
  • Supplemental Plan contributions are in addition to contributions required for the Primary Plan. More information about OMERS Primary Plan rates.
  • Contribution rates are based on actuarial assumptions such as the number of participants, operational expenses and interest rates, and include administration fees. Contribution rates could be adjusted in the future to reflect the cost of the benefits earned.
  • Important! Contribution rates apply to future service. (Future service is service after the coverage start date of the Supplemental Plan benefit.) Past service costings are based on the present-day cost. (Past service is credited service in the Primary Plan that a member earned before the coverage start date of the Supplemental Plan benefit.)

Does the Income Tax Act’s maximum pension apply?

Yes. If a member’s annual salary rate exceeds the amount that generates the maximum pension allowable by the Income Tax Act (ITA), Supplemental Plan contributions will stop. A member would not earn a benefit in the Supplemental Plan during any period in which their benefit exceeds the ITA limit.

Note: The limit only affects Supplemental Plan contributions. The Primary Plan includes a Retirement Compensation Arrangement to provide pension benefits for those members with earnings exceeding the ITA limit.

Contribution examples

Supplemental Plan benefits are not automatically provided. Employers can set up Supplemental Plan coverage for a class or classes of members in the police sector, firefighters and paramedics.