( NOTE: THIS IS AN UNOFFICIAL DOCUMENT. Check with HR and follow whatever they say. )
HR has put together a great Pension Plan Summary. Please read it! There are a LOT of nuanced details that are glossed over in this FAQ. The full legal pension plan document can be requested from HR if you’re into that kind of thing.
The assets of the pension plan are invested with the Ontario Municipal Employees Retirement System (OMERS) in a trust. The money is not at TMU or mixed with TMU’s general accounts. We have a Defined Benefit (DB) Pension. Your pension payments are guaranteed based on a specific formula. Your pension payments will not go down if the plan’s investments do.
The pension is ‘indexed’ to the Consumer Price Index (CPI) to reduce the impact of inflation. This means every year, your pension payments will increase by the CPI (up to 8%). The pension is mandatory for full-time employees, optional for term & part-time employees.
You contribute *roughly* 8.42% (-/+0.45% Grade1 to Grade16) of your salary and TMU matches this. The pension contributions reduce what you can contribute to your RRSP.
If you leave TMU before receiving your pension, there are multiple options to explore with HR.
You are eligible for a ‘full’ or ‘un-reduced’ pension when you meet any of these criteria:
at age 65 OR
you reach the ‘90 Factor’ (age + years of service =90) OR
you meet the ‘60/20 Rule’ ( 60+ years old AND 20+ years of service).
You are eligible for an ‘early’ or ‘reduced’ pension at age 55. This is an expensive option as your pension will be reduced by 5% for every year *before* your ‘full’ pension date (age 65 OR 90 Factor OR 60/20 Rule). Note: Even if you take a ‘full’ pension using the ‘90 Factor’ or ‘60/20 Rule’ your pension will be lower than the maximum possible at 35 years of service.
If you retire early (before age 65), you are eligible for an additional ‘bridge’ pension. This ‘bridge’ will last until age 65 and should be about the same as CPP/OAS at age 65.
In retirement, you can expect to receive *roughly*:
2% * years of service * average salary of 5 best consecutive years
Before age 65, this will include the bridge pension
At age 65 this will include CPP/OAS ie pension + CPP/OAS = 2% * service * avg salary
When you are ready to retire, notify HR & management ~6 months in advance of your planned retirement date. Please note that HR will need AT LEAST 3-4 months notice before you receive your first pension payment.
Your pension is paid monthly and can have income tax deducted from each payment.
The pension payments are adjusted every January using CPI data from October.
TMU benefits (health/dental) STOP in retirement. You can purchase an Extended Health Care (EHC) plan from TMU’s provider (Sunlife) or other providers. The cost & coverage of benefits vary greatly between providers and pre/post age 65. Talk to HR and shop around! A *rough* estimate (July 2022) for single, health & dental coverage is $80-$321/mn. If you want ‘full’ benefits similar to what you have now, expect to pay a lot ie $300-400/mn for single coverage. Family coverage is 2-3x the single rate. Look at the details - there will be coverage differences from the employee plan. You must enroll for health benefits promptly (within 3 months or less) after retiring to get the best pricing & plans available.
If you die after receiving your pension, there are several possible outcomes for your estate / spouse (possible lump-sum if single, 60% spousal pension). See the HR Pension Plan Summary (pg 10 “Forms of Pension”) for more information and talk to HR. Essentially, on the date of your retirement:
IF you are married, *that* spouse can receive the 60% survivor benefit when you die.
NOTE: If you marry / remarry after retiring, the ‘new’ spouse is NOT eligible.
IF you are not married, TMU guarantees 10 years of pension payments. If you die before receiving 10-years of pension, the balance is paid out to your estate / beneficiaries.
You can only contribute to the pension for 35 years. If you continue working for TMU after that, your pension will NOT be increased by any additional years of service or salary increases. Your contributions stop, the pension is calculated and set up as a deferred benefit (ie: to be taken at a later date) and the annual CPI indexation is applied to the pension each January 1st.
The TMU pension does NOT have a deferral bonus like CPP. If you defer your pension (ie retire at your “earliest un-reduced” date, but don’t take your pension until later) you are just losing out on income.
(Many thanks to Matthew Forrest to collecting the above information as it was lacking at the University)
Posted June 30, 2024