Employer Questions and Answers

For information about the features and benefits offered to members please see Your Guide to OPTrust Select.

Employers may be eligible to join OPTrust Select if they are:

• a charity in Ontario registered under the federal Income Tax Act
• a not-for-profit organization in Ontario incorporated under the Corporations Act (Ontario)
• a broader public sector organization in Ontario that receives a minimum amount of funding from the provincial government, or
• an eligible organization whose employees are represented by OPSEU and are not already eligible to participate in the OPSEU Pension Plan or another defined benefit pension plan.

An organization that is interested in participating in OPTrust Select must submit an application form to OPTrust, with a copy of the organization’s audited financial statements for the past three years and five years of depersonalized employee data. We will also ask the organization to sign a confidentiality agreement before any exchange of information. To request an application form, please email email@optrustselect.com or call 416 681-3609.

Participation in OPTrust Select is not automatic and must be approved by OPTrust. When reviewing an employer’s application, OPTrust considers a number of factors, including the organization’s financial viability, employee data and its administrative capabilities.

Once an application is approved, the organization will be required to enter into a participation agreement with OPTrust before beginning to enrol employees in OPTrust Select and remitting pension contributions. A sample copy of this agreement will be provided for information at the time an application form is requested.

All applications are subject to review and approval by OPTrust. When reviewing an employer’s application, OPTrust considers a number of factors, including the organization’s financial viability, employee data and its administrative capabilities.

Yes, employees can participate in both a group RRSP and OPTrust Select at the same time, subject to RRSP contribution room limits. Please contact us to discuss options.

To comply with the Income Tax Act, employees cannot participate in more than one registered pension plan offered by the same employer at the same time. If discontinuing or winding up the existing pension plan is a consideration, please contact us to discuss options.

This may be possible, but these types of transfers can be very complex, and many legislative rules apply. Please contact us to discuss options.

Under the terms of the Plan, all employees in a class designated as eligible under the employer’s participation agreement who are less than age 65 and who work on a continuous full-time basis are required to join the Plan. Employees in an eligible class who are less than age 65 and who work on a less than continuous full-time basis (e.g., part-time) are not required to join but may have the option to join under the employer’s participation agreement.

Yes, but participation by different classes of employees may vary depending on the terms of an employer’s participation agreement.

All employees of an organization can be eligible to join OPTrust Select. However, an employer may restrict eligibility for membership in the Plan to specific “classes” of employees in the terms of the participation agreement they sign with OPTrust.

Some examples of classes of employees include salaried, hourly, unionized, non-unionized, and supervisory or management.

The provincial regulator (FSCO) does not permit employers to designate a “class” or exclude employees from joining a pension plan solely because they work part time.

No, this is not permissible under the terms of the Plan. Membership in OPTrust Select is either mandatory or voluntary, and there is no probation period.

No, former employees cannot join OPTrust Select and buy back past service. To comply with rules set out under the terms of the Plan and the Income Tax Act, a person must be actively employed by an OPTrust Select Employer before they can join the Plan and at the time they buy back past service.

No. Under pension law, only people who are employed by a participating employer are eligible to join.

An employee who is required to join OPTrust Select but does not wish to join on the grounds of a religious objection may waive their right to join. OPTrust has developed a waiver form for this purpose. If the employee subsequently changes their mind and chooses to join the Plan in the future the employee will not be able to buy back pension service for the period of employment when they elected not to be in the Plan.

There is no option to stop contributing to OPTrust Select unless an employee’s membership in the Plan is terminated. As long an employer participates in OPTrust Select, the employees will continue their membership until they reach the earliest of the following:

• termination of employment
• retirement
• November 30 of the year they turn age 71, which is the Income Tax Act limit for accruing a pension, or
• death.

Employees will contribute 3% of their regular salary and the organization will match those contributions. Employers must also pay an additional 0.2% for the first two years they participate in OPTrust Select (3.2% in total).

This requirement was established by the Plan Sponsors to protect the fund in the event that an employer defaults on contributions owed to the Plan.

No. Contribution rates are currently set at 3% for all members and employers. OPTrust Select was designed with a single contribution and benefit rate structure that will provide retirement security at a cost that is affordable to most of the target organizations and their employees.

Yes, contribution rates may change if there is a significant funding shortfall. See the “Funding” section below for more details on how OPTrust manages this risk.

Yes, contributions that members make are tax deductible and reduce their taxable income in the year they are made. Employers report these contributions on members’ T4 slips. The contributions that employers make are not tax deductible for employees and are not a taxable benefit.

Employers are not refunded any contributions that they make. The contributions that both members and employers make, along with investment returns, fund the pension benefits that are paid to all members.

No. Employers and members are required to pay contributions, but no additional fees are charged. The administrative costs of running OPTrust are paid out of the Plan and these costs are very low compared to the costs associated with other types of retirement savings and income products.

To comply with rules set out under the terms of the Plan and the Income Tax Act, buybacks must be paid for by members. Employers cannot make contributions directly to OPTrust to pay for a member’s buyback.

Additional voluntary contributions are not permitted.

In the event the Plan is overfunded and has a surplus, the plan sponsors – the Government of Ontario and OPSEU – may decide to reduce member and employer contribution rates and/or improve benefits for members, former members and pensioners.

In the event of an unfunded liability or plan deficit, upgrades before retirement and cost of living adjustments after retirement would either not be granted or would be granted at less than 100% of the increase in the Consumer Price Index on a temporary basis. In the event these adjustments were insufficient to eliminate OPTrust Select’s share of the deficit, an increase in contribution rates or decrease in future benefits may be required. The decision to adjust contribution rates or reduce future benefits is made by the plan sponsors, the Government of Ontario and OPSEU.

If an employer terminates their participation in OPTrust Select, their employees will stop earning pension benefits as of the day the employer leaves the Plan. In the unlikely event that OPTrust Select is underfunded, that employer may be responsible for eliminating any unfunded liability relating to the pension benefits of its employees who are members, former members and/or retired members of OPTrust Select.

In the highly unlikely event that the OPSEU Pension Plan is wound up and there is a surplus, the surplus would be used for the exclusive benefit of the members and pensioners and their beneficiaries. If the Plan is wound up and assets are not sufficient to meet the Plan's liabilities, pension benefits may be reduced.

The fully funded status of the Plan is attributable to a combination of factors. These include investment performance, member and employer contribution levels and our funding policy that focuses on benefit security and contribution stability while maintaining inter-generational equity.

As a jointly sponsored pension plan, the OPSEU Pension Plan is not covered by the Pension Benefits Guarantee Fund.

Participating in a jointly sponsored pension plan is not without risks. Included among these is the possibility that benefits could be reduced if the Plan is wound up and does not have enough assets to cover the liabilities. However, our robust funding policy and enhanced risk sharing model mitigate against the risks. Our team of actuaries and investment professionals also monitor the health of the Plan on a regular basis.

Each spring, OPTrust posts our Funded Status Report, which provides detailed information about the Plan’s financial status, on our website.

Yes. OPTrust Select is a schedule of benefits under the the OPSEU Pension Plan. The Plan (including OPTrust Select) is registered as a defined benefit, jointly sponsored pension plan (JSPP) with the Financial Services Commission of Ontario (FSCO) under Ontario’s Pension Benefits Act. The Plan is also registered with the Canada Revenue Agency under the Income Tax Act.

A JSPP is a defined benefit pension plan in which the employers and members share responsibility for the plan’s governance and funding.

The OPSEU Pension Plan was established by the Government of Ontario and the Ontario Public Service Employees’ Union (OPSEU) to give members and employers an equal say in the governance of the Plan. The Plan is established as a trust governed by a Board of Trustees consisting of five government-appointed Trustees and five OPSEU-appointed Trustees. As sponsors, the Government represents all employers (including OPTrust Select employers) and OPSEU represents all members (including OPTrust Select members) for purposes of appointing the members of the Board and amending the Plan.

The Board of Trustees and its employees operate under the name “OPTrust.” OPTrust is the legal administrator of the Plan and is responsible for administering the Plan and managing and investing the Plan’s assets. OPTrust has a fiduciary responsibility to administer the Plan and invest the assets in the best interests of all plan members (including OPTrust Select members). OPTrust is not a crown agency and operates independently from its sponsors. Only the sponsors can make changes to the Plan, including changes in contribution levels and benefits.

OPTrust Select is a schedule of benefits under the OPSEU Pension Plan, it is not a separate pension plan. The OPSEU Pension Plan’s Board of Trustees oversees both the main schedule of benefits and OPTrust Select.

In accordance with the Sponsorship Agreement and Trust Agreement which created the OPSEU Pension Plan, only the Government of Ontario and OPSEU can appoint trustees to the Board. However, an OPTrust Select Advisory Committee consisting of representatives of OPTrust Select employers and members will be established when OPTrust Select reaches 1,000 members.

The advisory committee is a group of OPTrust Select members and employers that monitors the administration of the Plan and has the ability to influence decision-making by making recommendations and providing input to the Board of Trustees.