If conditional indexing is adopted, indexing will only be provided if the Plan is fully funded or in surplus.

Under the proposed changes, the granting of indexing, in full or in part, would not depend on full funding. The intent is to grant the maximum, sustainable level of indexing – provided it doesn’t materially reduce the Plan’s financial health. 

Here are the facts: 

  • If conditional indexing were introduced today, when the Plan is 94% funded, members would continue to receive full indexing. That’s because the Plan’s financial health continues to improve.
  • Conditional indexing simply provides an essential financial safety valve if the Plan suffers a significant financial setback (such as the 2008 financial crisis). Indexing will only be suspended, in whole or in part, if the Plan’s financial health deteriorates.
  • Our intent is to provide as much indexing as possible – including the possibility of restoring “lost” benefits – to the extent that it doesn’t put the Plan’s health at risk. That will be achieved in large part by the highest contribution levels in OMERS history, which employers (and members) will be asked to continue to pay.
  • If the Plan’s financial health does deteriorate, the Board will consider what changes need to be made. That could include reduced levels of indexing, but might include different benefit changes. If the Board does choose to reduce indexing on a temporary basis, the actual level of indexing to be granted would be subject to a 2/3rdmajority vote (just like any other Plan change).
  • This is an important lever to keep the Plan healthy through good times and bad – and for generations to come.  Senior leaders at Ontario Teachers’ Pension Plan, Healthcare of Ontario Pension Plan (HOOP) and Colleges of Applied Arts and Technology (CAAT) have confirmed that conditional indexing is critical to their financial health. They have also been able to continue to provide indexing.
MYTH #4 - Changes to how your pension is calculated would mean a substantial loss in benefits
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