Plan Change Announcements
OMERS Sponsors Corporation determines benefit levels and contribution rates for the OMERS Primary Pension Plan (Plan). Every year, the OMERS Sponsors Corporation Board (SC Board) reviews the health and viability of the Plan to ensure it remains sustainable, affordable and meaningful. As a result of reviews conducted in recent years, the following changes will take effect:
Effective June 21, 2023
Amendment to Normal Retirement Age (NRA) Conversions from 65 to 60
Changes the service adjustment applied to credited service when an eligible member’s NRA changes from 65 to 60 to reflect the NRA 60 early retirement benefits. The existing service adjustment methodology has been updated to add actuarial calculations that take into account actuarial assumptions, contributory earnings, and a member’s age and all service at the time of conversion. The service adjustment calculation will be based on the lowest of the following three percentages:
25% if the member is under age 60 or, if the member is age 60 or more, 5% multiplied by each year between the member’s age and age 65;
The percentage resulting from an actuarial equivalence calculation that uses the same actuarial basis used to determine the conversion cost; and
The percentage resulting from an actuarial equivalence calculation that uses a commuted value basis (taking into account the commuted value of the member’s benefit immediately before and after conversion).
This change is effective June 21, 2023 and applies to Plan members who have the option to have an NRA of 60, subject to negotiation (i.e., police officers, firefighters and paramedics), and whose NRA changes from 65 to 60 on or after June 21, 2023.
Effective June 24, 2020 and Extended Effective January 1, 2022
Due to the exceptional circumstances surrounding the COVID-19 pandemic, the following three changes were passed by the SC Board on June 24, 2020. Given that the pandemic is ongoing, on November 18, 2021, the SC Board passed the required amendments to extend the first two changes into 2022.
1. Extending leave purchase deadlines
Extends the deadline to complete a leave purchase by one year for members who return from a leave of absence in 2020, 2021 or 2022 (i.e., extending to December 31, 2022, December 31, 2023 or December 31, 2024 depending on the return date).
2. Permitting temporary layoffs as purchasable service
Allows members to purchase credited service for periods of absence due to temporary layoff that were initiated in 2020, 2021 or 2022. The service can be purchased at two times contributions (member only).
3. Reducing or eliminating the 36-month employment requirement for purchases of periods of reduced pay
Reduces or eliminates the 36-month employment requirement for purchases of periods of reduced pay, subject to changes to the Income Tax Regulations. The amendment passed by the SC Board on June 24, 2020 placed OMERS in a position to seamlessly adapt to the changes in the employment requirement under the Income Tax Regulations.
On July 2, 2020 the Department of Finance released draft regulations that set aside the 36-month employment requirement for periods of reduced pay in 2020. The Department of Finance subsequently extended these draft regulations to set aside this requirement for the 2021 year on May 20, 2021. The draft regulations have now come into force. Now members are eligible to purchase periods of reduced pay in 2020 and 2021 without consideration to the 36-month employment requirement.
This amendment will continue to recognize applicable changes to the Income Tax Regulation if they occur.
Effective January 1, 2021
Elimination of the 35-year cap for credited service
This change removes the 35-year cap on credited service for members with less than 35 years of credited service prior to January 1, 2021. Members who are retired or deferred prior to the effective date are not impacted by the change. If a member meets the 35-year cap before January 1, 2021, the limit will continue to apply.
Option to negotiate NRA 60 for paramedics
This change provides the option for paramedics to have a normal retirement age of 60 (NRA 60), subject to negotiation, starting on January 1, 2021. Paramedics will not automatically be eligible for NRA 60 benefits. As of January 1, 2021, an OMERS employer can elect to provide NRA 60 benefits to all or a class of paramedics. For unionized employees, NRA 60 benefits are subject to negotiation between employers and unions.
Effective January 1, 2023
Removes the current eligibility requirement for non-full-time employees to join the Plan so that all non-full-time employees may elect to join the Plan at any time.
This change is effective January 1, 2023, which means that until then, the current eligibility requirement continues to apply.
Technical amendment for non-full-time enrolment
Changes the enrolment date for non-full-time employees so that a non-full-time employee who elects to enrol in the Plan begins to participate in the Plan in their employer’s next available pay period following receipt of the election, and no later than the end of the month following the month in which the election is received.
Provides the option for the SC Board, based on its annual assessment of the Plan’s health and viability, to reduce future inflation increases on benefits earned after December 31, 2022.
This change is effective January 1, 2023 and does not affect benefits earned before that date. This means that when you retire, the benefits earned on or before December 31, 2022 will be granted full indexation. Benefits earned on or after January 1, 2023 will be subject to Shared Risk Indexing, meaning that the level of indexation will depend on the SC Board’s annual assessment of the financial health of the Plan.
More information will be available closer to the implementation date.