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Meet Ellen

Ellen joined OMERS at age 25 • School board employee, works full-time during regular school year (10 months) • Earns $66,000/year • Pay period contributions (matched by employer): $272.80 • Normal retirement age of 65 • Works 39 years with her OMERS employer • Retires at age 64 Annual pension from age 62-65: $134,426 Annual pension from age 65 onward: $97,294 Total pension received by age 85: $2,200,000

Overview of Ellen's expected monthly pension

Ellen’s estimated annual OMERS lifetime pension plus bridge benefit when she retires at age 64 is $134,426. This is a combination of the lifetime pension that Ellen receives after retirement for her lifetime and the bridge benefit she receives from her retirement date to age 65. This calculation is explained in further detail below, including assumptions about Ellen’s earnings.

By age 85, Ellen’s estimated total pension received would be $2,200,000 (excluding any inflationary increases provided in accordance with the OMERS Plan terms). Note that additional benefits may be payable after a member’s death. These benefits are explained in the Member Handbook and our Planning for Loved Ones page.

Let’s look at the details below.

In 2022, OMERS Plan contributions for members like Ellen who have a normal retirement age of 65 are equal to 9.0% of contributory earnings up to the(YMPE) and 14.6% of contributory earnings over the YMPE.

As noted above, Ellen will make contributions each pay period based on her gross contributory earnings and the YMPE per pay period.

In Ellen’s case, her employer uses a bi-weekly payroll cycle with 22 pay periods over the school year. This means that Ellen earns $3,000 per pay period in gross contributory earnings ($66,000 ÷ 22 pay periods).

The YMPE per pay period is calculated by dividing the YMPE for the year by the number of pay periods in the school year payroll cycle. For 2022, this is $2,950 ($64,900 ÷ 22).

Since Ellen’s per-pay-period gross contributory earnings are greater than the YMPE per pay period, her contributions per pay period (and her employer’s contributions on her behalf) are $272.80 [9.0% x $2,950 + 14.6% x ($3,000 - $2,950)].

Ellen’s per-pay-period contributions would change as her contributory earnings per pay period change.

OMERS pension formula

OMERS lifetime pension + bridge benefit [2% x credited service (years) x "best five earnings"] - OMERS bridge benefit [0.675% x credited service (years) x lesser of "best five" earnings or AYMPE*] = OMERS lifetime pension from age 65 *Five-year average of the year's maximum pensionable earnings (YMPE)

Let’s calculate the annual lifetime pension plus bridge benefit Ellen would receive after she retires from employment with her OMERS employer.

In this example, Ellen is eligible for an unreduced early retirement at age 55 when she has 30 years of service but chooses to keep working with her OMERS employer until age 64. Once Ellen stops working, she is eligible to start her pension and chooses to do so. If Ellen retired before she was eligible for an unreduced pension, her lifetime pension and bridge benefit would be reduced for early retirement. To learn more about reduced and unreduced early retirement pensions, please refer to the Retirement section of the Member Handbook.

“Best five” earnings

Remember that OMERS uses annualized contributory earnings when determining the “best five” earnings for non-full-time (NFT) members. In 2022, Ellen’s annualized contributory earnings are $79,200. For the purpose of calculating Ellen’s annual pension at retirement, let’s assume Ellen’s annualized contributory earnings have grown to $217,973 by age 64 and her “best five” earnings are $206,809.

Credited service

Ellen earns 0.833 years of credited service in each year worked with her OMERS employer (10 months/12 months). At the end of 39 years, this is 32.5 years of credited service (0.833 x 39 years).

Ellen’s lifetime pension plus bridge benefit to age 65 is calculated as follows:

2% x credited service (32.5 years) x “best five” earnings ($206,809) = $134,426

Once Ellen turns 65, her bridge benefit stops being paid and she continues to receive her lifetime pension for the rest of her life.

This is how we calculated Ellen’s lifetime pension after the bridge benefit stops being paid:

Ellen’s lifetime pension plus bridge benefit:
2% x credited service (32.5 years) x “best five” earnings ($206,809) = $134,426

Then subtract Ellen’s bridge benefit:
0.675% x credited service (32.5 years) x lesser of “best five” earnings or AYMPE* ($169,260) = $37,131

Which equals: $134,426 - $37,131 = $97,295

*The OMERS bridge benefit is calculated using Ellen’s credited service and the lesser of her “best five” earnings and the five-year average of the YMPE (AYMPE) when she ends employment with her OMERS employer. Ellen’s assumed AYMPE at the end of her employment is $169,260. Since this amount is lower than her “best five” earnings, it is used in the calculation above.