OUR COMMITMENT TO PROTECTING YOUR PENSION – A LETTER FROM THE SPONSORS CORPORATION
At the OMERS Sponsors Corporation (SC), we are committed to providing you with a secure pension now and into the future. We are responsible for determining benefit levels and contribution rates for the Plan and setting compensation levels and appointment protocols for both the SC and OMERS Administration Corporation (AC) Boards – we take this responsibility seriously! You deserve a pension that is sustainable, affordable and meaningful.
This includes making decisions about changes to the Plan when necessary. In considering potential changes the SC follows a rigorous decision-making process that includes extensive consultation with sponsors and stakeholders. The SC Board recently approved five amendments to the Plan following the 2020 Plan Review process. A description of each of these changes is provided in this newsletter here. The changes were made with the following objectives in mind:
- To assist members who may be facing challenges as a result of the COVID-19 pandemic.
- To give all employees the option of accessing a more secure retirement, regardless of whether they work full-time or other-than-full-time hours. This change will accommodate the realities facing today’s workplace population.
- To provide a risk mitigation tool that will allow the SC Board to better protect the health and viability of the Plan for the long-term.
Transparency is an important part of our commitment to you. Below is a list of the most commonly asked questions received by members related to these changes.
A: Each year, the SC Board considers the health and viability of the Plan, and whether any changes should be made. This is part of our normal Plan Review process. We have a responsibility to protect your pension, both in good times and in bad, including during COVID-19. Anyone can participate in that process and provide their input.
This year, prior to the pandemic, the SC Board went beyond the minimum requirements and launched a four-month consultation process that included a dedicated website, six forums with OMERS sponsor and stakeholder groups, and many one on one meetings with stakeholder groups. The SC Board also considered comments received from more than 20,000 individuals during the consultation process.
A: We need to protect the Plan against future risks. Shared Risk Indexing provides a tool to manage risks over the long-term and allows sharing of those risks across a wider range of Plan members. This helps to reduce the potential impact to any individual Plan member.
A: No. At this point in time, no changes have been made to the indexation of any member’s pension.
A: Shared Risk Indexing means that on or after January 1, 2023, the SC Board will have the option to reduce inflation increases on service earned on or after that date. This decision will be made annually, based on the SC Board’s assessment of the health and viability of the Plan. Service earned before January 1, 2023 will always receive 100% inflation indexing. The impact on any individual OMERS member will depend on when they earned service in the Plan and when they retire.
A: Any service earned before January 1, 2023 will always be protected by 100% inflation indexing. For service earned on or after that date, the only time an OMERS member will receive less than 100% indexation on their pension will be if the SC Board votes to change it for the year. The SC Board will revisit this assessment annually.
A: No. All current retirees will continue to receive full guaranteed inflation protection on their pensions. Even if the SC Board votes to adjust indexation in the future, current retirees will continue to receive full guaranteed inflation protection.
A: Yes. If you are temporarily laid off in 2020 or 2021, you can purchase credited service for this period so long as your employment was not terminated, by you or your employer, before June 24, 2020. You will be required to pay both your contributions and your employer’s contributions.
A: Yes. Effective January 1, 2023, all employees who work for an OMERS employer are eligible to enrol in the Plan.
Thank you to all the members that engaged with us throughout this year’s decision-making process. Your input is important and always appreciated. Further, and as always, thank you for your commitment to the people and communities that you serve.