How Job Changes Affect Pension Entitlements
Effective: May 17, 2004
Bulletins about mandatory pension transfers enable employees to make more informed decisions
The Ontario Pension Board (OPB) has created two new bulletins that will enable you to better assist employees (current or potential) who are in a pension transfer situation triggered by a new job offer. One bulletin focuses on the impact of transferring from the OPSEU Pension Plan to the Public Service Pension Plan (PSPP), while the other looks at the impact of transferring from the PSPP to OPSEU Pension Plan.
Addressing an information gap
As you know, a job change within the Ontario Public Service and/or an ABC (with the same or a different employer) may entail a change in pension plan membership. This is because there are two separate plans - the PSPP and the OPSEU Pension Plan, each covering a different group of employees within the OPS.
Transferring between these two pension plans due to a job change has led to some confusion about pension entitlements. Employees may not be aware of differences between the two Plans that can affect their benefits and options once they transfer (e.g. temporary early retirement provisions). One reason may be that they do not have access to the pension-related information they need prior to making a decision on a job change that triggers a transfer.
An information tool employees can take away
These bulletins were developed to help employees understand what a transfer in pension plan membership means for them - before they accept a job offer. Their pension is an important piece of their overall compensation, so they need to explore the differences between the two Plans to find out how these differences can impact them.
As a first point of contact for many of these individuals, you may receive questions from them regarding pension transfers. The bulletins are information tools that will help them better understand what to expect if they do transfer pension credits. OPB staff are ready to assist if they have questions about pension entitlements under the PSPP.
Who would most benefit from these bulletins?
Consider handing out this bulletin to:
- 1. Employees enrolled in the OPSEU Pension Plan considering a job change that will trigger a mandatory transfer into the PSPP and new employees who recently moved into the PSPP from the OPSEU Pension Plan.
- 2. Employees enrolled in the PSPP who are considering a job change that will trigger a mandatory transfer into the OPSEU Pension Plan.
- New employees with a deferred pension
Also noted in the bulletin are new employees who have a deferred pension (i.e. new employees under the PSPP with deferred entitlements under the OPSEU Pension Plan). For more information, the bulletin refers them to Understanding Your Pension Credit.
These bulletins, speaking directly to the employee, include:
- A section on the transfer of pension credit and what happens when the value of the pension credits transferred into the new plan is equal to, greater or less than the value in the former plan
- A section ('New job, more pay?') about how a salary increase can offset a reduction in pension benefits resulting from a transfer
- A step-by-step overview of the differences between the plans on key benefits and features, including contributions, early retirement provisions and reductions, CPP integration and provisions on survivor pension
The PSPP also participates in transfer agreements with a number of public and private sector pension plans. These transfer agreements affecting employees who are, for example, moving from a municipality or a private company to the OPS, are subject to different requirements. Employees who have questions about these transfers should read Transferring Pension Credit out of the PSPP and Transferring Pension Credit into the PSPP - both accessible on our Web site in the Booklets section under Publications.