Calculation & Deduction of Pension Contributions

Member Regular Contributions

Members are required to contribute 3% of their gross pensionable pay. You are required to deduct member contributions from each pay and remit them to OPTrust within specified timelines

The chart below summarizes the most common inclusions and exclusions from pensionable pay.

Your Pension Partner will schedule periodic meetings and keep you up to date on Plan news, administration updates, etc.

Included in Pensionable Pay Excluded from Pensionable Pay
Regularly paid salary Overtime
Retroactive salary Bonuses or one-time payments
Holiday pay taken as paid leave (e.g. vacation and statutory holidays) Pay-in-lieu of benefits (e.g. holiday pay for time not taken)
Other periodic payments regularly paid as a permanent component of pay (e.g. remote location pay) Shift premiums

Employer Regular Contributions

You are required to match the 3% of members’ pensionable pay.

Employer Special Contributions

For the first two years of participation in OPTrust Select, you are required to pay an additional 0.2% of members’ pensionable pay.

A major change in the organization (e.g. a merger or reorganization) could have an impact on your participation in OPTrust Select, including a requirement to remit an additional 0.2% for new members for another two-year period. Please advise your Pension Partner as soon as possible of any planned organizational changes.

Calculation Details

You may, at your discretion, maintain a consistent remittal of contributions based on one of two methods which produce the same result over the long term:

  • A. The number of pay cycles in the year, i.e. 26/27 for biweekly cycles
    • in a tax year with 27 pay cycles this creates marginally lower biweekly contributions, but higher
      aggregate annual contributions
  • B. Based on the days in the cycle as a ratio of an average year, i.e. 14/365.25
    • this creates consistent contributions regardless of the number of pay cycles within a tax year
How to determine a member’s bi-weekly deduction:
Contribution Rate x Annualized Pensionable Pay x Employment Ratio x Method A or Method B ratio

Scenario 1:
Annualized Pensionable Pay = $50,000
Employment Ratio = Part time – 60% (0.6)

Contributions How it’s calculated Deduction from bi-weekly pay
Member – A 0.03 x 50,000 x 1 x 1/26 57.69
Member – B 0.03 x 50,000 x 1 x 14/365.25 57.49
 
Employer Regular – A 0.03 x 50,000 x 1 x 1/26 57.69
Employer Regular – B 0.03 x 50,000 x 1 x 14/365.25 57.49
 
Employer Special – A 0.002 x 50,000 x 1 x 1/26 3.85
Employer Special – B 0.002 x 50,000 x 1 x 14/365.25 3.83

Scenario 2:
Annualized Pensionable Pay = $50,000
Employment Ratio = Full time – 1

Contributions How it’s calculated Deduction from bi-weekly pay
Member – A 0.03 x 50,000 x 0.6 x 1/26 34.62
Member – B 0.03 x 50,000 x 0.6 x 14/365.25 34.50
 
Employer Regular – A 0.03 x 50,000 x 0.6 x 1/26 34.62
Employer Regular – B 0.03 x 50,000 x 0.6 x 14/365.25 34.50
 
Employer Special – A 0.002 x 50,000 x 0.6 x 1/26 2.31
Employer Special – B 0.002 x 50,000 x 0.6 x 14/365.25 2.30
Note: Please consult your Pension Partner for more information if you have a different pay cycle.

Suspended Contributions

If an OPTrust Select member becomes a member of the primary schedule of benefits of the Plan, all contributions to OPTrust Select must be suspended (i.e. member and employer contributions must cease to be paid into OPTrust Select) until the individual’s employment under the primary schedule of benefits has been terminated. At that time, member and employer contributions will resume without retroactive payments for the period of suspension. OPTrust will inform you when contributions should be suspended and/or resumed.

Leave Contributions

When a member is absent from work on an approved leave of absence, the member and employer pension contributions may be mandatory or optional, depending on the type and length of the leave. See Leaves of Absence section.

If a member contributes during an unpaid leave period, they pay OPTrust directly. Following receipt of the member contributions, OPTrust will invoice you for your portion, if applicable.

Contributions for leave periods are calculated at the same rate as regular contributions (3% each or 3.2% for employers if the leave occurs during the first two years of plan participation) and are based on the member’s pensionable pay immediately prior to the leave.

If the leave period extends into a subsequent calendar year, the pensionable pay on which the contributions are based is increased by the maximum cost of living adjustment (COLA) applicable to OPTrust Select pensions in pay for that calendar year. This is true whether or not the member would have received a pay increase and whether or not the COLA is actually applied. The increase is subject to an annual maximum of 8%. Your Pension Partner will inform you of the COLA each year.

Note: Information about our privacy policies is available at optrustselect.com.