April 2017

No matter what stage of life you're in, preparing for retirement is one of the most important steps you can take to secure your future. The sooner you begin to think about it and take action, the better prepared you'll be.

"Whether you're in your 30s, 40s or nearing retirement, putting a solid strategy in place is critical to helping you achieve your retirement goals," said Anthony D'Amico, Client Service Advisor and Certified Financial Planner at Ontario Pension Board. "It's never too soon to seek professional financial advice to ensure you're on track."

What you can do now

  1. Think about your goals - When do you want to retire? What kind of lifestyle do you want to lead? Do you want to travel extensively or stay close to home to enjoy time with family and friends? Before you can create an effective retirement plan, you need to set realistic goals you can track towards. It's also important to occasionally review your goals to make sure you're still on track. Understanding when you want to retire and then knowing what you want to do in retirement can help determine how much income you'll need.
  2. Identify your income sources - What's your current income? What will it be once you're retired? What you earn now is clear, but to understand what you'll receive in retirement requires thought and planning - we can help. Start by defining your income pillars - PSPP pension, government programs (e.g., OAS, CPP), your personal savings (e.g., RRSPs, TFSAs, other savings/investments), and even your spouse's or partner's pension. This will help you get a better sense of what your retirement income will be and how well prepared you are.
  3. Understand your expenses - Have you thought about what your expenses will be in retirement? This is just as important as understanding your retirement income. It's important to be realistic. To help you, OPB has an online Retirement Planner that takes you through your income sources and expenses. Going through this exercise early can help prevent any unexpected surprises. Most importantly, it gives you the chance to determine if you need to make any adjustments by making additional savings decisions, or in extreme cases, adjusting your expectations in retirement. The earlier you start planning, the better off you'll be.
  4. Consider if you need additional investments - As a member of the PSPP, you're already saving for your retirement, but you may also be investing money to help meet your retirement goals or to help with other financial and life objectives. When investing, it's important to consider your life stage and overall goals. It's also a good idea to revisit your risk tolerance regularly so you can make any necessary adjustments as your life circumstances or savings goals change.
  5. Maximize your income - To help you maximize your income in retirement, consider tax planning strategies - like pension income splitting - with your partner and developing a tax-effective strategy to withdraw income from other retirement vehicles. Check out the Retirement Planner in e-services - it'll make your planning easier.

Retirement isn't just another phase of life, it's a complete lifestyle change. Careful planning now will help ensure you're able to enjoy the retirement you want later.

Check out My Retirement Planner - our free, online tool available through OPB's e-services. This planning tool helps you understand and forecast your complete financial retirement picture, including your projected income from all sources and your projected expenses in retirement to find out if you're saving enough for your future.

You can also book a one-on-one session with one of our advisors, who are Certified Financial Planners, to discuss any questions you have about your retirement and pension. Our Advisory Services are available to you at no cost and are offered either in-person or over the phone. To book a session, log into our secure e-services at www.opb.ca or call our Client Care Centre at 416-364-5035 or toll-free at 1-800-668-6203.

Tips for saving effectively

The good news is, with your PSPP pension, you're on your way to meeting your retirement goals, but your plan will vary depending on your personal circumstances. Our Certified Financial Planners have put together these tips to help you save:

  1. Develop a 5 and 10-year plan of where you see yourself. Set realistic targets and factor in your savings too. What are your financial goals now and over the long-term? The PSPP is just one piece of the puzzle.
  2. Create an emergency fund! You may need to tap into it at some point, so this should be part of your overall plan.
  3. Set up your savings accounts. Register for a TFSA and RRSP. TFSAs are great for shorter-term savings, like saving up to buy a car, whereas an RRSP is a longer-term savings vehicle that can be tapped into later in life, and if you're a first time homebuyer.
  4. Don't forget to pay yourself. When you get your tax refund, allocate an amount to paying off any debt first and then consider investing some of it into your TFSA or RRSP. If you're trying to determine where it makes sense to allocate your money, chat with us about how these decisions can fit into your overall plan.
  5. Forced savings is the way to go. Set up automatic transfers to direct your pay to a savings account. Learning to live on less is easier than having to distribute it manually each month - you'd be surprised how quickly the amount can grow!

As a member of the PSPP, do I need to save more for retirement? What if I have a mortgage or other debt? Am I financially prepared? Do I know what to expect once I've retired?

These are all important considerations that we'll discuss in our upcoming Advisory workshops. Find the workshop that makes the most sense for you - whether you're early, mid or late-career. The content is geared to the questions you need to think about at each stage.

In addition to strengthening your financial planning knowledge and understanding of how the PSPP fits into your financial picture, our workshops provide an opportunity for small group discussions with our advisors and other members in a similar life stage.

Our Advisory Workshops are held at OPB's offices in Toronto from 5 p.m. to 6:30 p.m. Here are some upcoming workshops:

Retirement Planning Advisory Workshops (for late-career members)

  • August 23, 2017
  • November 22, 2017

Register today in e-services by selecting ‘Upcoming Member Events’ under the ‘My pension’ tab.

Stay tuned for...

  • early and mid-career workshop dates!
  • workshops for members outside the GTA –we’re looking into how to expand our offerings.

Now that you've received your Annual Pension Statement, it's a good time to review and update your contact information (address, phone, and personal email), marital status, and beneficiaries. You can do this online using OPB's secure e-services. We use your contact information to keep you updated.

If you haven't already registered for e-services, go to our website at www.opb.ca, click Login at the top-right corner of the page and follow the steps online, or call OPB's Client Care Centre at 1-800-668-6203 to register immediately over the phone.

Throughout the year we'll post important updates about the Plan, new advisory workshops, and expert retirement planning articles to help you maximize the value of your pension.

To ensure you receive these updates, make sure you're registered for e-alerts.

If at any time you want to be removed from our distribution list, you can simply send an email to clientservice@opb.ca and indicate ‘Unsubscribe' in the subject line.

In last year's OPB News issue, we shared the announcement that the Plan Sponsor amended the PSPP to change the pension impact of receiving Long Term Income Protection (LTIP).

The change was for certain groups of PSPP members who incur a disability on or after January 1, 2016 and who are non-bargaining employees of a ministry, a Minister's office, a Commission public body or the Office of the Lieutenant Governor.

The rules also apply to:

  • full-time appointees to a tribunal or regulatory body;
  • employees of the Office of the Auditor General; and
  • members represented by the Association of Ontario Physicians and Dentists in Public Service.

The new rules also apply to Case Management Masters who incur a disability on or after January 1, 2017.

In the future, other PSPP employers can opt into the new LTIP rules.

Important: Members who are currently receiving LTIP as a result of a disability incurred before January 1, 2016 are not affected by these changes.

What's different under the new rules?

  • Members will accrue 70% of the pension credit they regularly accrued prior to incurring the disability;
  • Members will make pension contributions based on 70% of the member's salary before they began to receive LTIP, adjusted annually for inflation; and
  • Employers will make matching pension contributions.

In response to feedback you gave us last year, we've implemented a few new initiatives to improve the client experience that we want to share with you.

The improvements include: sending more proactive communications to keep you informed about your retirement process; eliminated our beneficiary form (made it simpler and moved it online!); and, to get you started on the next stage of your journey, we want to introduce our latest online feature - the ability to Initiate Retirement.

How to officially start your pension

Initiate Retirement is an online feature in e-services that allows you to initiate and manage your retirement from the PSPP. You can submit your application, monitor the status, and send us your elections and documents - all online.

What are the key benefits?

  • Easy to use
  • Secure - provides a secure, electronic channel for you to initiate your retirement
  • Fast - quick turnaround times for document uploads allow you to fast track your elections and get your pension set up quickly!
  • Paperless - you can initiate your retirement and manage it all online
  • Convenient - you can log in and monitor the progress of your retirement from start to finish - and in real time. This also saves you from having to contact us for a status update on your retirement.

To use the Initiate Retirement feature, simply login to your e-services account and under ‘My planning' select ‘initiate and track retirement'.

Important: Don't forget to notify your employer about your intent to retire before using this online tool.

Last year we announced OPB's participation with the Ontario Government and Workplace Safety and Insurance Board (WSIB) in the creation of an asset pooling arrangement through the new Investment Management Corporation of Ontario (IMCO) Act which was proclaimed by the Ontario Government on July 1, 2016.

The IMCO Act enables OPB, WSIB, and other broader public sector entities to pool the management of their assets together through IMCO. OPB and WSIB will be the first two organizations to place their assets under IMCO's management. The initial pooling of assets from OPB and WSIB will provide IMCO with more than $50 billion of assets under its management.

Through IMCO, we will be more competitive and have greater access to investment and partnership opportunities. We'll also be in a stronger position for negotiating investment terms and agreements, and will be better able to attract and retain top-tier investment professionals. Simply put, IMCO will allow us to create better value for our members.

While IMCO will be responsible for managing OPB's assets, OPB will continue to own its assets and maintain control over the strategic asset mix of the Plan, and will oversee IMCO's management of our assets in the future. The Plan's assets and liabilities will remain separate from WSIB, and any other clients of IMCO, and OPB will continue to administer the PSPP just as it does now.

IMCO is expected to be operational as an independent investment manager for its first clients, OPB and WSIB, by mid-year.

For more information on asset pooling, check out our 2015 Annual Report, available on our website at www.opb.ca

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.