How Do AVC's Work?
AVCs are part of the OMERS Primary Pension Plan, but are separate from your.
How do I contribute?
There are two ways to contribute to an AVC account.
1. Fund transfers
The fund transfer option is available to all OMERS members during the annual AVC transfer-in window from January 1 to June 30 of each year, until the year they turn 70. Fund transfers to your AVC account may come from an RRSP, a locked-in retirement account (LIRA) or other registered retirement vehicles.
Lump-Sum Transfer Process Roadmap Additional Voluntary Contributions (AVCs)
Lump Sum FAQs
Effective January 1, 2022, AVC lump-sum transfers can be transferred to a member’s account during the annual AVC transfer-in window from January 1 to June 30.
Financial institutions may charge transfer fees. Please contact your financial institution directly to discuss costs or fees, if any, related to the transfer of funds. There are no OMERS specific costs associated with transferring funds into an AVC account.
Yes, but we cannot accept funds (e.g. LIRA and RPP) that are locked-in under another provinces jurisdiction.
The AVC Enrolment form must be completed unless you fast track the transfer through myOMERS.com. In addition you would complete a T2033 if transferring funds from an RRSP or LIRA account and/or the T2151 if transferring funds from an RPP or DPSP account.
Funds can be transferred in lump-sum from registered retirement vehicles. This includes:
Registered retirement savings plans (RRSP)
Registered pension plans (RPP), defined benefit or defined contribution
Locked-in retirement accounts (LIRA), which generally holds funds transferred from a RPP
Deferred profit sharing plans (DPSP)
You will need to complete an AVC Fund Transfer Package, to initiate the transfer of funds. The AVC Fund Transfer Package (Form 402) consists of an AVC Enrolment form and two direct transfer forms (T2151 and/or T2033) that relate to the type of fund you are transferring from. If you fast track the transfer process through myOMERS.com an AVC Enrolment form will not be required.
You can access the AVC Fund Transfer Package (Form 402) on the Member Forms page or request mailed/faxed copies by calling Member Experience at: Phone: +1 416.369.2444 Toll-free: +1 800.387.0813
If you fast track the process through myOMERS simply follow the steps under your AVC account to transfer funds and print the pre-populated forms.
The AVC Enrolment form is submitted to OMERS. This is not required if you fast track the transfer process through myOMERS.com .
Original signed T2033 and T2151 documents are submitted to the financial institution from which the funds are being transferred.
No, transferring will not trigger a taxable event as funds are being transferred from one registered retirement vehicle to another.
Your contributions are credited with the OMERS Fund’s (the Fund’s) net rate of return for the calendar year, prorated to reflect when the deposit was made. This means that the return that will be credited on your contributions is determined by the performance of the Fund over the course of the full year, not just from the point when your deposit was made.
To learn more about how the net rate of return is applied to your account, check out our Rate of Return Examples.
2. Automatic contributions
Automatic contributions are available to you if you are an. They're easy to set up, and:
Are automatically withdrawn via pre-authorized debit or payroll deduction if your employer offers the AVC payroll deduction option.*
Are subject to minimum and maximum contribution limits established by OMERS
Are tax-deductible in the year they are made.
When deciding on how much, and how often, you wish to contribute, please remember that the $35 annual administration is not prorated and the full amount applies to your account regardless of the number of months contributed for the year. Keep this in mind when considering the amount, start date and frequency of your automatic contributions.
*OMERS employers can choose to offer the AVC payroll deduction option.
Catch-up payments for automatic contributions
Members making automatic contributions can make a payment to catch up on their automatic contributions for the year.
You may be able to make a catch-up payment if:
you started automatic contributions partway through the year; or
you’ve been contributing less than your biweekly or monthly maximum.
Ready to make a catch-up payment? Catch-up payments can be made online through myOMERS or by completing a paper form (AVC Catch-up Payments - Form 406).
Peter has been making monthly automatic contributions of $150 since the beginning of the year. The monthly maximum he can contribute is $250.
If Peter makes a catch-up payment in August, the maximum payment he can make is:
7 months (January 1 to July 31) X $100 (see note below) = $700.
If Peter had been contributing $250 (the maximum for his earnings and service for the entire year, he would not have been able to make a catch-up payment. However, if Peter started making automatic contributions partway through the year, he could make a catch-up payment for the months he did not contribute.
Note: $250 (Peter's monthly maximum based on their earnings and service) minus $150 (the amount of their actual monthly contribution).
Jane was enrolled in the OMERS Plan on March 1 and she immediately started making automatic contributions. The monthly maximum she can contribute is $250. She has been making monthly contributions of $150.
If Jane makes a catch-up payment in August, the maximum payment she can make is:
5 months (March 1 to July 31) x $100 (see note below) = $500.
Note: $250 (Jane’s monthly maximum based on their earnings and service) minus $150 (the amount of their actual monthly contribution).
Ready to get started with a transfer or automatic contributions?
Automatic contribution limits
Contribution limits are based on contributory earnings and, and take into account the pension adjustment (PA) reporting rules of the Income Tax Act.
Contributory Earnings
Biweekly Maximum 26 Debits per Year
Monthly Maximum 12 Debits per Year
Less than $4,445
nil
nil
$4,445 - $11,522
$20.00
$40.00
$11,523 - $19,749
$38.46
$83.33
$19,750 - $27,983
$57.69
$125.00
$27,984 - $36,211
$76.92
$166.67
$36,212 - $44,444
$96.15
$208.33
$44,445 - $158,248.80
$115.38
$250.00
Over $158,248.80
$20.00
$40.00
The limits were calculated using the 2023 CPP earnings limit.
Withdrawal Options
Your options as an active pension plan member
PARTIAL WITHDRAWAL
Maximum 20% of the prior year-end AVC account balance subject to a minimum of $500.
FULL WITHDRAWAL
If partial withdrawals are made in each of four consecutive years, the 20% limit does not apply in the fifth consecutive year. In the fifth year, you can withdraw up to your entire account balance (excluding current year contributions).
WITHDRAWAL WINDOW
March 1 to April 30
NON-LOCKED-IN FUNDS IN AN AVC ACCOUNT
Can be taken as cash, less withholding tax, or transferred tax-deferred to an RRSP, a registered retirement income fund (RRIF) or another registered pension plan.
LOCKED-IN FUNDS IN AN AVC ACCOUNT
Can be transferred only to a locked-in arrangement, such as a LIRA or a locked-in provision under a registered pension plan.
When you retire or leave your OMERS employer
OPTION 1: Withdraw all or some of the funds in your AVC account
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You may withdraw all or some of the funds in your AVC account at any time within the first 6 months after retirement, or upon leaving your OMERS employer if you keep your pension with OMERS*. After that, you can withdraw all or some of the funds during the March/April window.
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Withdrawals are subject to a minimum of $500.
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Non-locked-in funds in your AVC account may be withdrawn as cash, less withholding tax.
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Up to the year you turn 71, non-locked-in and locked-in funds in your AVC account may be transferred to another registered retirement savings vehicle, tax-deferred,or used to purchase an annuity.
OPTION 2: Keep your AVC account (if you keep your pension with OMERS)
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You can keep the funds in your AVC account.
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Non-locked-in funds can remain in your account past the year you turn 71 through the AVC Income Option.
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The full balance of locked-in funds must be withdrawn by October 31 of the year your turn 71.
Mandatory full withdrawal
If you no longer have an accompanying benefit under the OMERS Plan, you cannot continue your AVC account. You must withdraw or transfer the full balance of your AVC account:
if you terminate your membership in the defined benefit provision of the OMERS Plan and transfer out the commuted value of your pension
if you use the shortened life expectancy provision of the OMERS Plan
In addition, you must withdraw or transfer the full balance of any locked-in funds by October of the year you turn 71.
In the event of your passing
In the event of your death before or after retirement, your surviving spouse is entitled to a refund of your AVC account balance, provided you were noton the date of your death, and your surviving spouse did not waive his or her entitlement.
If you don’t have a spouse, the refund will be paid to your designated(ies) on file with OMERS. If you don’t have a spouse or designated beneficiary(ies), the refund will be paid to your estate.
For more information on this process, consult the Terms of Participation.
How to withdraw funds from your AVC account
There are two ways to withdraw funds from your AVC account:
Do it conveniently online through the myOMERS secure member access site. Not registered for myOMERS yet? Sign up for myOMERS
Or, complete a paper withdrawal form and return it to OMERS.
If you choose the paper withdrawal option, be sure to complete the correct form:
In the year you turn 71 and beyond, you will have to use the paper form. You will not be able to initiate your withdrawal using myOMERS.
AVC Income Option withdrawals (beginning the year you turn 72)
To make an optional withdrawal during the annual March 1 to April 30 withdrawal window, you will need to use the paper form. You will not be able to initiate your withdrawal using myOMERS.
Rate of Return Examples
The following examples show how the rate of return for the OMERS Primary Pension Plan (OMERS Plan) is applied to a member’s AVC account in six different scenarios.
Scenarios
The first five scenarios show how the rate of return is applied in the normal course, which is:
The rate of return for the OMERS Plan is established on or around March 1st each year – this is the rate determination date for AVC purposes.
After the rate determination date, the annual rate of return, less investment management expenses and the annual AVC administration fee, are applied to a member’s AVC account.
The rate of return is applied on a pro-rated basis to any amounts that are held in a member’s AVC account for part of the year.
The last two scenarios show differences in how the rate of return is applied when a member elects to withdraw his or her entire AVC account balance (e.g., on termination of employment or retirement). Specifically, these scenarios show differences in how the rate of return is applied depending on whether the member’s AVC withdrawal forms are received by OMERS before or after the rate determination date.
For more details, and for the definitions of the “annual rate of return,” the “five year average rate of return” and “rate determination date,” please see the Terms of Participation.
Scenario 1: No contributions or withdrawals
Scenario 2: Lump-sum transfer
Scenario 3: Partial withdrawal
Scenario 4: Year member opens an AVC account
Scenario 5: Negative rate of return
Scenario 6: Full withdrawal (documents received after the rate determination date)
Scenario 7: Full withdrawal (documents received before the rate determination date)
Note: All figures are for illustrative purposes only and do not reflect past or future returns or expenses. Results are rounded to the nearest dollar for illustrative purposes.
Scenario 1: No contributions or withdrawals
Bob did not make any contributions to or withdrawals from his AVC account during 2030. Once the 2030 rate of return is established on or around March 1, 2031, Bob’s account will be updated for 2030 as follows.
Assumptions
AVC account balance as at December 31, 2029
$100,000
2030 annual rate of return
7.5%
2030 investment management expenses
0.5%
Net rate of return applied to Bob’s AVC account
7%
How the rate of return is applied to Bob’s AVC account
AVC account balance as at December 31, 2029
$100,000
Plus net rate of return (7% applied to $100,000)
+$7,000
Less administration fee
-$35
AVC account balance as at December 31, 2030
$106,965
Scenario 2: Lump-sum transfer
Bob makes a lump-sum transfer into his AVC account during 2030. Once the 2030 rate of return is established on or around March 1, 2031, Bob’s account will be updated for 2030 as follows.
Assumptions
AVC account balance as at December 31, 2029
$100,000
Lump-sum transfer on March 31, 2030
$25,000
2030 annual rate of return
7.5%
2030 investment management expenses
0.5%
Net rate of return applied to Bob’s AVC account
7%
How the rate of return is applied to Bob’s AVC account
AVC account balance as at December 31, 2029
$100,000
Plus non-pro-rated net rate of return (7% applied to $100,000)
+$7,000
Plus lump-sum transfer on March 31
+$25,000
Plus pro-rated net rate of return (7% applied to $25,000 for 9 months of the year)
+$1,312
Less administration fee
-$35
AVC account balance as at December 31, 2030
$133,277
Scenario 3: Partial withdrawal
Bob makes a withdrawal from his AVC account during 2030. Once the 2030 rate of return is established on or around March 1, 2031, Bob’s account will be updated for 2030 as follows:
Assumptions
AVC account balance as at December 31, 2029
$100,000
Withdrawal on March 31, 2030
$10,000
2030 annual rate of return
7.5%
2030 investment management expenses
0.5%
Net rate of return applied to Bob’s AVC account
7%
How the rate of return is applied to Bob’s AVC account
AVC account balance as at December 31, 2029
$100,000
Less withdrawal on March 31
-$10,000
Plus non-pro-rated net rate of return (7% applied to $90,000)
+$6,300
Plus pro-rated net rate of return (7% applied to $10,000 for 3 months of the year)
+$175
Less administration fee
-$35
AVC account balance as at December 31, 2030
$96,440
Scenario 4: Year member opens an AVC account
Bob opens an AVC account on September 30, 2030. Once the 2030 rate of return is established on or around March 1, 2031, Bob’s account will be updated for 2030 as follows.
Assumptions
AVC account balance as at December 31, 2029
$0
Lump-sum transfer-in on March 31, 2030
$2,000
2030 annual rate of return
7.5%
2030 investment management expenses
0.5%
Net rate of return applied to Bob’s AVC account
7%
How the rate of return is applied to Bob’s AVC account
Lump-sum transfer-in on March 31
+$2,000
Plus pro-rated net rate of return (7% applied to $2,000 for 9 months of the year)
+$105
Less administration fee
-$35
AVC account balance as at December 31, 2030
$2,070
Scenario 5: Negative rate of return
Bob did not make any contributions or withdrawals to his AVC account during 2030. Once the 2030 rate of return is established on or around March 1, 2031, Bob’s account will be updated for 2030 as follows:
Assumptions
AVC account balance as at December 31, 2029
$100,000
2030 annual rate of return
-1.5%
2030 investment management expenses
0.5%
Net rate of return applied to Bob’s AVC account
-2%
How the rate of return is applied to Bob’s AVC account
AVC account balance as at December 31, 2029
$100,000
Plus non-pro-rated net rate of return (-2.0% applied to $100,000)
-$2,000
Less administration fee
-$35
AVC account balance as at December 31, 2030
$97,965
Scenario 6: Full withdrawal (documents received after the rate determination date)
Bob is retiring from his OMERS employer and has decided to withdraw 100% of the funds in his AVC account upon retirement. OMERS receives his AVC withdrawal form in September 2030. The rate determination date for 2029 was March 1, 2030.
Since Bob returned his AVC withdrawal form after the rate determination date for 2029, Bob’s AVC account balance to December 31, 2029 has already been updated with the annual rate of return for 2029, less investment management expenses and the AVC administration fee for 2029.
For 2030, Bob’s AVC account balance as at December 31, 2029 is updated with the five-year average rate of return, less investment management expenses, and the AVC administration fee for 2030 – to the date his AVC account is paid out in 2030.
Assumptions
AVC account balance as at December 31, 2029
$100,000
Five-year average net rate of return for 2025, 2026, 2027, 2028 and 2029
7%
Date Bob’s account is paid out
September 30, 2030
How the rate of return is applied to Bob’s AVC account
AVC account balance as at December 31, 2029
$100,000
Plus pro-rated five-year average net rate of return (7% applied to $100,000 for 9 months of the year)
+$5,250
Less administration fee for 2030
-$35
AVC account balance on date account is paid out
$105,215
Scenario 7: Full withdrawal (documents received before the rate determination date)
Bob terminates employment with his OMERS employer and has decided to withdraw 100% of the funds in his AVC account upon retirement. OMERS receives his AVC withdrawal form in January 2030. The rate determination date for 2029 will be on or around March 1, 2030.
Since Bob returned his AVC withdrawal form before the rate determination date, Bob’s AVC account balance to December 31, 2028 will first be updated to December 31, 2029 with the five-year average rate of return, less investment management expenses, and the AVC administration fee for 2029.
For 2030, Bob’s updated AVC account balance as at December 31, 2029 is updated using the same five-year average rate of return, less investment management expenses, and the AVC administration fee for 2030 – to the date his AVC account in paid out in 2030.
Assumptions
Account balance as at December 31, 2028
$100,000
Five-year average net rate of return for 2024, 2025, 2026, 2027 and 2028
7%
Date Bob’s account is paid out
January 31, 2030
How the rate of return is applied to Bob’s AVC account
First, Bob’s account is updated to December 31, 2029
AVC account balance as at December 31, 2028
$100,000
Plus five-year average net rate of return (7% applied to $100,000)
+$7,000
Less administration fee for 2029
-$35
AVC account balance as at December 31, 2029
$106,965
Then, Bob’s account is updated to January 31, 2030 (date funds withdrawn)
AVC account balance as at December 31, 2029
$106,965
Plus pro-rated five-year average net rate of return (7% applied to $106,965 for one month of the year)
+$624
Less administration fee for 2030
-$35
AVC account balance on date account is paid out
$107,554
Your Pension, AVCs and RRSP room
The amount you can contribute to your RRSP in any year – your RRSP “room” – is calculated as follows:
Pension Adjustment (PA) – The PA puts a value on the benefit you earned in OMERS for the year and it reduces the amount you can contribute to RRSPs in the following year. So, your 2017 PA reduces your available RRSP room in 2018. Your employer reports your PA in Box 20 of your T4 tax slip.
AVC automatic contributions – Like your PA, AVC automatic contributions reduce the amount you can contribute to RRSPs in the following year. AVC automatic contributions are made by pre-authorized debit or employer payroll deductions. Employer payroll deductions are included in the PA in Box 20 of your T4 tax slip. Funds coming into an AVC account from a registered retirement vehicle (e.g., RRSP) are already tax sheltered and don’t affect RRSP room.
Example 1 – RRSP room
About the OMERS member:
18% of 2017 income: $13,000
Unused room carried forward from previous years: $0
PA on the 2017 T4 slip: $10,000
Contributions to AVCs by pre-authorized debit in 2017: $2,000
The member’s RRSP room is calculated as follows:
OMERS AVC Automatic Contribution Limits – To reduce the likelihood of members over-contributing to an RRSP, we’ve established automatic contribution limits. These limits are based on earnings andand take into account the PA rules. For more on how the limits work, see page 10 the AVC Guide. The limit does not apply to transfers from a registered retirement vehicle because the funds are already tax sheltered – i.e., there is no minimum or maximum for fund transfers to an AVC account.
See the current AVC automatic contribution limits
Example 2: The bigger picture (year-over-year)
Another member begins making AVC automatic contributions in 2017 and wants to contribute up to the AVC limit. The member’s available RRSP room for 2017 is $4,000 after accounting for OMERS PA from the previous year. In 2017, the member can make $4,000 in RRSP contributions (in addition to any unused room carried forward from previous years) plus $3,000 in AVC contributions, which is the automatic contribution limit based on the member’s earnings and credited service, for a total tax-deductible contribution of $7,000.
In 2018, the member’s available RRSP room is $1,000 after accounting for OMERS PA and AVC automatic contributions from the previous year. The member can make $1,000 in RRSP contributions (again, in addition to any unused room carried forward from previous years) plus $3,000 in AVC contributions for a total tax-deductible contribution of $4,000 for 2018.
18% of annual income
PA on T4 tax slip
AVC automatic contribution limit for current year
Available RRSP room for following year – after OMERS PA & AVCs
RRSP room (max. RRSPs in current year)
Max. RRSPs and AVCs in current year
2016
$16,000
$12,000
$16,000 – $12,000 = $4,000
In 2017, the member begins making AVC contributions by pre-authorized debit and contributes up to the AVC limit.
2017
$17,000
$13,000
$3,000
$17,000 – (13,000 + $3,000) = $1,000
$4,000
$3,000 + $4,000 = $7,000
2018
$18,000
$14,000
$3,000
$18,000 – ($14,000 + $3,000) = $1,000
$1,000
$3,000 + $1,000 = $4,000