Four key facts about Shared Risk Indexing

The May edition of this newsletter included an overview of Shared Risk Indexing (SRI). This Plan change was approved by the OMERS Sponsors Corporation (SC) Board in June 2020. It gives the SC Board the option to adjust the level of inflation protection, also known as indexing, on benefits earned after December 31, 2022. Any decision to change the level of inflation protection would be based on the SC Board’s assessment of the health of the Plan.

Similar provisions are common across other pension plans and considered prudent plan management because they help enhance the plans’ health and sustainability.

Here are four key facts to keep in mind:

1. SRI will not impact retired members' 2023 indexation increase.

2. Pension payments will never go down as a result of SRI.

3. A decision to set the level of SRI to anything other than 100% of OMERS calculation for the inflation increase requires a two-thirds majority vote of the SC Board.

4. If ever used, SRI affects only the level of inflation protection on benefits earned for service post-2022 (i.e., earned on or after January 1, 2023). Benefits earned on pre-2023 service continue to receive guaranteed full inflation protection.

We will continue to provide information and updates on SRI and its contribution to Plan resilience.