New contribution rates have been established for the OMERS Supplemental Plan for Police, Firefighters and Paramedics (the “Supplemental Plan”). The new rates, effective from January 1, 2011, were announced by the OMERS Sponsors Corporation (SC) in August.
The Supplemental Plan was established in 2008 under provincial legislation. Supplemental benefits offered under the plan can “top up” the pension that a member already earns in the OMERS Primary Pension Plan (the “Primary Plan”).
The benefits are not automatic. They can be offered by an OMERS employer, typically as the result of the collective bargaining process.
Supplemental Plan contribution rates are paid by any members participating in the Supplemental Plan, as a percentage of total earnings, and matched by the employer. The rates may include an additional “rebound” contribution to the Primary Plan. This ensures the Primary Plan does not subsidize the Supplemental Plan.
Contributions start from the effective date of Supplemental Plan coverage and apply to future service. A participating member also has the option to “top up” any of their Primary Plan past service in the new Supplemental Plan benefit, based on a cost provided by OMERS.
The latest SC announcement on Supplemental Plan rates requires the SC to pass a corresponding bylaw – scheduled for September 2011.
“The new Supplemental Plan contribution rates are set assuming a minimum of 5,000 participating members,” says Anne Soh, OMERS VP, Actuarial Services.
As of August 2011, there were no members in the Supplemental Plan. However, OMERS continues to respond to questions from employers and associations and provide information and cost estimates.
“It’s important to note that in the event that participating membership does not exceed 5,000 in future, rates may have to increase. One reason this can occur is that administration costs, which are reflected in the rates, would be spread across a smaller group of participating members,” says Anne.
Effective January 1, 2011, the new contribution rates for the Supplemental Plan (and rebound rates for the Primary Plan) are as follows:
For comparison, the previous rates are shown below:
“Our website has been updated with the new contribution rates and contains detailed information on Supplemental Plan benefits. We have also published a fact sheet explaining Supplemental Plan basics and the steps employers and associations should follow in the case that these benefits are offered to members,” Anne says.
“Employers should notify OMERS if they plan to establish Supplemental Plan benefits for their members.”
Important steps and considerations, along with Supplemental Plan basics and resources, are outlined in the attached fact sheet: OMERS Supplemental Plan Facts [199 KB].
Police sector, firefighter and paramedic members of the OMERS Primary Pension Plan are eligible for Supplemental Plan benefits when provided by an OMERS employer. Eligibility for specific benefits varies – for full details, see Supplemental Plan information in the Employers and Members sections.