Employer Payments for Reinstatements
Effective December 12, 2000
We have implemented a new practice for determining the employer's cost when a member reinstates pension credit in our plan. The reason for the change was to ensure a more precise costing. The new practice, which is retroactive to January 1, 1998, may result in savings for employers.
Previously, when a member purchased prior contributory service, the employer was required to pay the same amount as the employee. Employer costs will now be determined as follows:
- For non-vested prior contributory OPS service, the employer pays nothing. The employee pays for the entire purchase.
- For vested prior contributory OPS service, the employer may be required to pay the same amount as the employee, a 'top-up' payment or nothing, depending on how the employee cost is calculated.
We have reviewed all reinstatements of past service made since January 1, 1998, and made the necessary adjustments to employer accounts.
Note: These changes do not affect the employee costing and do not affect the buyback process.