Information about income tax and your OMERS pension is valuable.
Be sure to make use of all available tax credits and deductions to help maximize your money. For example:
The tax withheld from your OMERS pension is based on your monthly pension payments, your federal and provincial income tax forms (TD1) or country of residence information, and any additional tax you've asked us to withhold.
To update your federal and provincial income tax information, complete and send OMERS the TD1 forms available on the Canada Revenue Agency (CRA) website
OMERS will send you a tax slip for your OMERS pension (retirement, survivor or disability pension) by the end of February each year. The tax slip is your official proof of income for tax purposes. It shows the total amount of pension paid to you during the previous calendar year and the total tax deducted.
Tax slips are mailed to your principal (home) address.
If you haven't received your tax slip by early March, contact OMERS Client Services; we will confirm your mailing address and send you another slip.
Income tax is deducted from your OMERS pension as required by the CRA. You can also arrange to have OMERS deduct additional tax from your monthly payments. For example, if your total income puts you into a higher tax bracket, increasing the tax at source may help you avoid a big bill at tax time. We recommend discussing your overall tax situation with a tax adviser or the CRA.
To request or to change the additional amount of tax withheld from your monthly pension payments:
Send the completed form or letter to:
One University Avenue, Suite 400
Toronto, ON M5J 2P1
Fax: 416-369-9704 Toll-free fax: 1-877-369-9704
If you receive more than one OMERS pension (e.g., from OMERS Primary Plan and from the RCA) you will need to submit a separate additional tax request for each pension.
The basic personal amount is the income threshold at which CRA begins to deduct taxes. This amount is indexed to inflation, based on the Canadian Consumer Price Index (CPI) as reported by Statistics Canada. An increase in the basic personal amount means a greater portion of your pension income is not taxed.
A retro-payment is likely be taxed at a higher rate than monthly pension payments. The tax on monthly payments is calculated on an annualized basis using a blended tax rate. Each portion of the monthly pension payment is placed into the applicable tax bracket, as set out by the CRA.
Have a look at these sample tax rates:
For a $3,000 monthly pension payment ($36,000 annually), a portion is taxed at 10% and a portion is taxed at 20%. A retro-payment of $3,500 would be taxed at 20% because it falls in the $30,000 to $60,000 income range.
When you file your tax return, your total OMERS income, including the retro-payment, is factored in with the tax paid for the year. If your tax paid is in excess of what is required on your income from all sources (e.g., CPP, OAS, RRIFs, etc.), you would get a refund from CRA.
OMERS can forward a copy of your tax slip directly to your accountant: send us a written request with your full name, signature, OMERS reference number (or social insurance number), and the accountant's name, address and fax number.