OPB News for Retired Members

March 01, 2023
Features 6 articles

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March 01, 2023

Demystifying your cost-of-living adjustment (COLA) benefit

2 minute read

As a Public Service Pension Plan (PSPP) member, you receive a valuable benefit called a cost-of-living adjustment (COLA) each year that allows you to maintain your buying power as prices rise with inflation. This year, COLA is 6.3 per cent.

COLA is cumulative, which means that this year’s increase is added to your previous year’s pension. COLA is announced each December on OPB.ca. Your personal COLA increase is provided in the annual Retired Members Statement (RMS) you receive in January.

Breaking down COLA

We are required under our PSPP plan text to calculate COLA using a specific formula based on the consumer price index (CPI). It is a measure of the average price change of goods and services bought by Canadians. CPI is a measure of inflation determined by the Canadian Government and released by Statistics Canada.

The CPI is calculated monthly by Statistics Canada and measures the changes in prices of certain consumer items. The CPI is calculated using “a fixed basket of goods and services.” Picture a basket filled with items such as housing, food, water and hydro, clothing and transportation. Items change yearly to represent Canadian spending patterns. The cost change of these items is tracked over time. If the total cost of the basket increases, inflation will rise.

Your COLA may not reflect the increase in the cost of goods and services or match the inflation rate in any given month. This is because our calculation approach ensures that peaks and valleys in inflation are averaged over a longer period of time.

Three-step process to calculating your COLA:

  • We look at the CPI over a 24-month period that ends on September 30 of the current year. We then divide that figure into two 12-month periods both from October 1 to September 30
  • For each 12-month period, we calculate the average of the monthly CPI
  • Then we divide the average of the second 12-month period by the average of the first 12-month period, which gives us the COLA for the coming year

Your PSPP pension is increased by the amount of the CPI up to a maximum of eight per cent. When the CPI is higher than eight per cent, the excess is carried over to the next year when the CPI is less than eight per cent.

Regardless of your eligible retirement date, COLA helps protect your pension from inflation to help you maintain your purchasing power throughout retirement. Our formula also protects the sustainability of the PSPP plan for our current and future members.

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March 01, 2023

Stay connected with e-services

1 minute read

OPB’s e-services portal is an easy and secure way to connect with us. If you haven’t yet registered for your e-services account, we recommend that you do so. The benefits include:

  • Improved accessibility features
  • Easy updating of personal information
  • Access to OPB’s Secure Document Upload tool
  • Choosing to receive your Annual Pension Statement or your Retired Member Statement exclusively online
  • Book a 1-on-1 meeting with an Advisor
  • Sign up for optional e-alerts to receive more frequent updates

Register for e-services(opens in a new tab) today. Have your OPB client number handy. If you’re having difficulty activating your account or using any of the tools in e-services, our knowledgeable staff can assist you.

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March 01, 2023

The Fuller Files: Looking ahead to 2023

1 minute read

A new year has begun, and there’s much to look forward to at OPB.

To our new retirees who are receiving their first Retired Member Statement, congratulations and welcome to retirement!

The last few years have been tumultuous for all of us, but your PSPP pension has been kept safe and secure. The Plan is still well-funded on a long-term basis and is backed by the provincial government, which means your pension is protected through economic ups and downs.

At OPB we have progressed well through the pandemic, maintaining a high level of service for our members. We have transitioned to a hybrid working model and have done so seamlessly, allowing us to continue to be there for our members.

Happy New Year to you and your loved ones from all of us here at OPB.

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March 01, 2023

IMCO announces interim climate targets to reduce portfolio emissions

5 minute read

OPB understands that environmental issues such as climate change and a transition to a low-carbon economy are important to our members and stakeholders. OPB recognizes that climate change poses a material and increasing risk to a range of assets we may invest in and, together with the Investment Management Corporation of Ontario (IMCO), is committed to making meaningful progress in managing climate change risk through our investments.

Last November, OPB’s investment manager, the Investment Management Corporation of Ontario (IMCO), committed to reaching net zero portfolio emissions on behalf of OPB and IMCO’s other clients by the year 2050 or sooner. As part of that commitment, IMCO has now set an interim target to reduce its portfolio’s carbon emissions intensity by 50 per cent by 2030 from a 2019 baseline. In addition, IMCO has also set a target to invest 20 per cent of its portfolio in climate solutions by 2030. These targets are consistent with science-based net zero pathways aimed towards the 1.5°C temperature goal of the Paris Agreement and net zero emissions by 2050.

Setting these interim targets is an important milestone on our path to achieving net zero emissions and fighting climate change. OPB and IMCO remain committed to making meaningful progress towards mitigating climate change.

What is net zero?

When we talk about IMCO achieving net zero emissions in our investment portfolio, we are talking about them taking several steps, including changing which companies are held in the portfolio, as well as investing in companies that reduce their greenhouse gas emissions to as close to zero as possible, and then neutralize the impact of any residual emissions that cannot be eliminated by removing an equivalent amount of carbon from the atmosphere.

What are portfolio emissions?

Portfolio emissions refer to emissions that are emitted by the businesses or assets that we invest in through IMCO and are often referred to as financed emissions. As an institutional investor, they make up the majority of our and IMCO’s emissions impact (the balance would be emissions from IMCO and OPB operations).

IMCO’s net zero targets are based on reducing their portfolio’s carbon emissions. To determine their path to net zero, IMCO first had to go through a rigorous exercise to calculate the baseline carbon emissions for their portfolio. IMCO released their 2019, 2020 and 2021 emissions totals as part of their 2021 ESG report. IMCO follows the guidelines set out by the Partnership for Carbon Accounting Financials (PCAF) to measure emissions. This means that IMCO calculates its portfolio carbon emissions (i.e. total financed emissions) in proportion to its share of the total financing (equity and debt) of an investment or asset. IMCO’s net zero targets are based on reducing the emissions intensity of their portfolio.

More about IMCO’s interim targets

As we mentioned earlier, IMCO has set an interim target to reduce its emissions intensity by 50 percent by 2030 in comparison to their 2019 baseline of 75 metric tonnes of carbon dioxide equivalent (CO2e) per million dollars invested.

It is important to note that IMCO’s emissions intensity target covers investments in the asset classes where there is PCAF guidance and established best practices on how to calculate and disclose emissions. The asset classes included in the target represent about 70 percent of IMCO’s portfolio, including:

  • Public Equities,
  • Private Equity,
  • Global Credit,
  • Real Estate, and
  • Infrastructure.

Most of the remainder of the portfolio not covered comes from government bonds and public market alternatives where guidance is not currently available. As further guidance becomes available on how to measure emissions in other asset classes, IMCO will look at expanding its reporting.

What to expect going forward

The goal of reaching net zero emissions in our investment portfolio by 2050 or earlier is an important commitment that both OPB and IMCO understand will take time and diligence to reach. IMCO’s 2030 interim target is measured based on emissions intensity, which is calculated as emissions per million dollars of investment value. The nature of the intensity-based metric means that a change in the value of a company’s shares or the value of an asset such as a building can influence the emissions intensity measure because the emissions intensity is normalized per million dollars of investment. Therefore, it’s possible that emissions intensity measures could decrease in the future because market values increase even if there is no change in actual emission levels, and vice versa. In 2022, for example, given the volatility in the markets and asset values, many organizations are expecting increases to their portfolio’s emissions intensity because of the decrease in company values.

It’s important to understand that the path to reaching the interim emissions targets, and subsequently, the 2050 net zero targets, may not always be a straightforward decline with year-over-year, linear emission reductions. While IMCO will, of course, track annual performance, what will be critical to us meeting our target is looking at the trend over several years to ensure the general portfolio emission trajectory is tracking down.

Another measure that we expect IMCO will continue to report on to help us assess how we are tracking overall is the total financed emissions (i.e., absolute emissions).

Investing in climate solutions

In addition to the interim targets announced today, IMCO has also set a goal that 20 per cent of its total investment portfolio will be invested in climate solutions by the year 2030. The term climate solution refers to businesses whose primary objective is to solve climate-related challenges and, in turn, slow the advance of climate change. Climate solutions are critical to society’s successful transition to a low-carbon economy. These solutions exist across many different industries, such as energy (example: developing renewable energy sources and alternative fuels), infrastructure (low-carbon transportation), construction (as certified by green building standards such as LEED), and many others. IMCO’s definition of climate solutions is aligned to the categories set out by the International Capital Markets Association Green Bond Principles. By investing in these solutions, we expect our investment portfolio can be well positioned to assist in the transition ahead.

How OPB and IMCO continue work together on ESG

IMCO considers all material ESG factors when it manages OPB’s investments, including climate-related risks and opportunities. We expect IMCO to not only integrate ESG considerations in the investment process, but also to influence investee companies through engagement and shareholder voting to improve corporate practices and to avoid investments with problematic ESG issues.

To learn more about IMCO’s announcement, please visit www.imcoinvest.com(opens in a new tab).

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March 01, 2023

Deadline coming to buy back your reduced working hours

1 minute read

You have until July 31, 2023 to apply to purchase full-time credit for periods of eligible temporary part-time work arrangements (TPTWA) that took place during your active membership.

In 2021 we advised that you may have an opportunity to buy back TPTWA credit. This is credit for a period when you temporarily reduced your working hours (e.g., from full-time to part- time) under an arrangement agreed with your employer during a period of active Public Service Pension Plan (PSPP) membership.

We introduced TPTWA buybacks following the Supreme Court of Canada ruling in Fraser vs. Canada (Attorney General) that members of a federal government pension plan were eligible to buy back full-time pension credit for periods of employment when they temporarily reduced their working hours. The TPTWA buyback application period began on August 1, 2021.

After July 31, 2023, retired member TPTWA buyback applications will not be accepted. While you still have time, this window is the last opportunity retired members have to buy back pension credit for a TPTWA period.

See more information on the criteria to buy back a temporary part time work arrangement.

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March 01, 2023

How mindfulness and meditation can help you find balance

3 minute read

When we think about improving our health, we often seek out exercises that benefit our cardiovascular strength, build our muscles, or increase our flexibility to help avoid aches and pains. While these are all important, there are other wellness practices that we should consider for our mental health, and they include mindfulness and meditation.

What is mindfulness?

As defined by Psychology Today, mindfulness is a state of active, open attention to the present.

With roots in Buddhist and Hindu teachings, mindfulness was largely introduced to Western wellness culture by Jon Kabat-Zinn. In the 1970s, Kabat-Zinn developed the Mindfulness-Based Stress Reduction (MBSR) program to treat chronic pain and studied the impact of mindfulness as a professor at the University of Massachusetts medical school.

Mindfulness focuses on two core tenets: awareness and acceptance. By being seated, taking deep breaths, and focusing on each sensation you notice, you’re practicing awareness. By shifting attention to the thoughts and emotions you’re experiencing in the moment — and allowing them to exist without judgement — you’re practicing acceptance.

Mindfulness has become entrenched in many aspects of wellness, with benefits including lowered stress levels and a reduction in anxiety, depression, and pain. Some research also suggests that mindfulness has a positive impact for people dealing with rejection and social isolation.

How does meditation work?

Meditation goes hand-in-hand with mindfulness and can assist with the focus on awareness and acceptance.

While there are different kinds of meditation (guided, mantra, transcendental, for example), there are some key elements that allow you to practice meditation almost anywhere at any time.

  • A comfortable position: being seated, lying down, walking, or while in other gentle movement like yoga or tai chi
  • A quiet space: especially as a beginner, meditation is much easier in a quiet setting with few distractions like phones or televisions
  • Relaxed breathing: meditation requires deep and paced breathing, with a focus on slowing your inhale to take in more oxygen
  • Focused attention: finding one thing to focus on, like an image, object, mantra, or the act of breathing

A new challenge with great benefits

While it can often be difficult to slow down, sit quietly, and stay in the moment. Mindfulness and meditation require us to stretch ourselves in new ways, but both give us an opportunity to improve cardiovascular health, lower stress levels and increase mental wellness, and find peace in the present. If mindfulness and meditation are new practices for you, are you up for the challenge? The benefits might just be worth it.

OPB News provides general information relevant to PSPP members. This publication is not to be relied on as legal, financial or tax advice. Please note that if there is any conflict between the contents of OPB News and the legal documents governing the PSPP, the legal documents governing the PSPP will prevail. For detailed and personalized advice about the PSPP, or retirement planning more generally, please contact one of OPB's Client Service Advisors. You can do this by logging into e-services and using the Book my 1-on-1 feature.