Maximum Pension Limit

The Income Tax Act limits how much pension we can pay from OMERS registered pension plans (RPPs). In 2012, this limit is $2,646.67 per year of post-1991 service. (The limit increases each year.) When a benefit is paid, OMERS must ensure the total pension payable from the RPPs is under this limit:

• For the 2.33% accrual rate, the benefit payable from the Supplemental Plan may be affected when the earnings used in the pension formula exceed $127,311.00.
• For the "best three" and "best four" earnings benefits, the benefit payable from the Supplemental Plan may be affected when the earnings used in the pension formula exceed $148,317.50.

If the benefit exceeds the limit, there may be no benefit payable from the Supplemental Plan. If there is no benefit payable, the minimum value guarantee:

• Would apply and the member's Supplemental Plan contributions plus interest may be refunded.
• The Primary Plan includes a retirement compensation arrangement (RCA) to provide pension benefits exceeding the maximum pension limit. The Supplemental Plan does not have an RCA as the cost would be prohibitively high.

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.