OPB News: Phase 2 contribution rate increase begins this month
Last year, we let you know that we would be phasing in a 1% contribution rate increase starting in April 2018 (0.5%) as the cost of providing pensions has gone up.
We want to remind you that Phase 2 takes effect on your first full pay this month (0.5%).
This is the first pay where the pay period start and end dates are both in April. You will notice a slightly higher deduction going forward. Your contributions will continue to be matched by your employer and they are tax deductible up to the Income Tax Act limit.
Even with this increase, our contribution rates remain among the lowest of the public sector plans in Ontario and continue to provide excellent value for members and employers. All the PSPP’s pension benefits remain intact.
If you are an Ontario Provincial Police officer, you won’t see an impact because your additional 50/30 contribution is decreasing by the same amount (0.5%).
Note: The contribution rate increase does not apply to Case Management Masters
The new rates
This change will be phased-in over a 2-year period.
|As of January 2018||As of April 2018||As of April 2019|
|6.4% of your salary up to the YMPE ($55,900)
9.5% of your salary above the YMPE
|6.9% of your salary up to the YMPE ($55,900)
10% of your salary above the YMPE
|7.4% of your salary up to the YMPE ($57,400)
10.5% of your salary above the YMPE
Calculating your contribution increase
Once the full increase is implemented, members will contribute on average 8.5% of their pensionable salary (up from 7.5% currently). We’ve put together a chart to help you understand what the increase will mean to you next year and after the ﬁnal phase-in in April 2019. Again, your employer will match these amounts.
Keep in mind contributions are tax deductible up to the Income Tax Act maximum ($19,641 in 2019).
|Pensionable salary||Annual contributions as of April 2019||Difference once fully implemented|
For more information, please read: