Your Pension during Retirement - OPTrust

1 DECEMBER 2014 your Pension during RETIREMENTWHAT YOU NEED TO KNOW AFTER your Pension STARTS3 How to contact usMember Services:(416) 681-6100 in the Toronto calling area1 800 637-0024 toll-free within CanadaFax: (416) 681-6175 Email: Mailing Address:OPSEU Pension Trust1 Adelaide Street East, Suite 1200 Toronto, ON M5C 3A7 This booklet is available as a PDF on our website and is compatible with screen booklet is intended as a summary description of the OPSEU Pension plan (or plan ). The plan text contains numerous provisions not summarized in this booklet, which may also apply to you and affect the information in this booklet as it applies to you.

2 The Board of Trustees of the OPSEU Pension plan Trust Fund is legally empowered to interpret the provisions of the OPSEU Pension plan . The Board s interpretation is THE EVENT OF ANY CONFLICT BETWEEN THIS BOOKLET AND THE OPSEU Pension plan TEXT, THE plan TEXT WILL this booklet, mathematical examples have been rounded to the nearest dollar. 4 IntroductIon 6 Joint governance ..7 About the OPSEU Pension plan ..7 Defined benefit to your Pension after you retIre 8 How and when your Pension is paid ..9 Inflation protection annual to your Pension at age 65 ..11 What CPP offers ..11 How your OPTrust Pension is Collecting CPP before age Other factors to Old Age When a retiree dies before age after your Pension a retiree lacks the capacity to deal with his or her financial affairs.

3 17wHat deductIons are taken from your Pension ? benefit premiums ..20 Spousal or child support Canada Revenue Agency deductions ..21No other deductions benefIts for survIvors 22 Who gets a survivor benefit?..23 Residual in your spousal If your spouse dies before you ..24 If you have a new spouse before your Pension begins ..24 If you have a new spouse after If your marital relationship If you have no eligible survivors when you Remarriage of surviving spouse ..26 HealtH, dental and lIfe Insurance benefIts 27 What are the benefits? ..28 Who gets the benefits?..29wHen a retIree dIes 30 Contacting OPTrust .

4 31 The necessary forms ..31 Documents needed ..31 Payments to survivors, beneficiaries or the to plan ahead to avoid delay and reduce terms 33commonly asked questIons 36 How we stay In toucH 396 INTRODUCTIONiNTrOduCTiON7 The OPSEU Pension plan is the result of years of discussion between the Government of Ontario and OPSEU to create a Pension plan in which the members have a say. The Board of Trustees of the OPSEU Pension plan Trust Fund administers the OPSEU Pension plan . The plan is funded pursuant to the OPSEU Pension Trust ( OPTrust ) which officially began operating on January 1, is a legal trust formed by a contractual agreement between the two plan sponsors, OPSEU and the Ontario Government.

5 OPTrust is at arm s-length from both plan governanceThe Board of Trustees of OPTrust is made up of 10 trustees, five appointed by the Government of Ontario and five appointed by OPSEU. The Board of Trustees is responsible for the investment of the plan s funds and the administration and interpretation of the plan . In this booklet, we use the terms OPTrust and we and us to refer to the Board of Trustees of OPTrust and its staff and agents, who together administer the the OPSEU Pension PlandefIned benefIt planThe OPSEU Pension plan is a defined benefit plan . This means that your retire-ment Pension is based on a formula that takes into account your salary and Pension service in the plan to calculate the value of your Pension H A N G E S T O Y O U R P E N S I O N AFTER YOU RETIRE9 How and when your Pension is paidAt OPTrust , pensions are paid on a monthly basis, usually on the 26th except for December when we pay pensions earlier.

6 When you retire your first Pension payment will be paid on the 26th of the month following your date of Retirement . So, if you retire on May 15th, your first Pension payment would arrive on June 26th. Normally, we only deduct income tax based on your OPTrust Pension income unless you tell us you want other deductions. If you want additional tax deducted, you can use our secure Online Services or complete a Personal Information Change Request or an Income Deduction Change form available on our website and send it to your convenience, we offer direct deposit to the financial institution of your choice anywhere in Canada and in the United States.

7 Inflation protection annual adjustmentEvery January your Pension , or that of your survivor, is adjusted for the increase in the cost of living. The adjustment is applied in January of the year after you start to receive a Pension . The first adjustment is pro-rated for the length of time you received a Pension in the previous year. The inflation adjustment reflects the increase in the cost of living in Canada (as measured by the change in the Consumer Price Index over two 12-month periods ending the preceding September). For example, the 2015 inflation adjustment was calculated as: The maximum increase in any one year is 8%.

8 Any increase above 8% is carried forward into the next year, when the adjustment is less than 8%.[ 1 2 4. 6 1 2 2. 5 ] 2012 to September 2013 October 2013 to September 2014 October 2012 to September TO your Pension afTEr yOu rETirE10 This chart shows how the inflation protection feature of the OPSEU Pension plan works. The graph plots the growth of a Pension over a 10-year period from 2006. (This chart is based on past changes in the Consumer Price Index. It is not necessarily indicative of future inflation adjustments.)ExAMPlE: Pension WITH PRO-RATED INflATION INCREASET erminated from plan March 2014 Pension began April 2014 Number of months on Pension 9 (April December) OPTrust inflation adjustment for 2015 to calculate your pro-rated 2015 increase: number of months on Pension , divided by 12 x increase in CPI for 2015 = your 2015 adjustment (9 12 x = )In January 2015, your Pension would be increased by to reflect the cost of living for nine months.

9 In following years the full CPI increase (up to 8% in any given year) is : HOW A Pension GROWS WITH INflATION PROTECTION 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015$34,000$33,000$32,000$31,000$30,000$ 29,000 ChaNgES TO your Pension afTEr yOu rETirE11 Changes to your Pension at age 65 The Canada Pension plan and your Pension from OPTrust : The Canada Pension plan (CPP) provides Retirement benefits to individuals who have contributed to it during their employment. your Pension from OPTrust is designed to provide you with a combined Pension income at age 65 from both OPTrust and CPP that equals approximately 2% of your average salary multiplied by your years of Pension service in the OPSEU Pension plan .

10 In effect, if you retire before age 65, OPTrust pays a temporary bridge Pension to make up the full 2% Pension benefit. When you were a contributing plan member, you made reduced contributions to the OPSEU Pension plan on the portion of your earnings that is also covered by CPP. This contribution integration is taken into account in the way your OPTrust Pension is calculated starting at age 65. When you reach age 65 the bridge Pension from OPTrust stops and your 2% Pension will be made up of a lifetime Pension from OPTrust plus a CPP Pension . Important: In most cases, the amount of bridge Pension you receive from OPTrust up to age 65 and the amount of Pension you receive from CPP, will not be the same.