2010 Specified Plan Changes

DECISIONS

Following the process and protocol detailed in By-Law #12, the 2010 SC decisions (to either amend, withdraw, approve, reject or move to mediation/arbitration) about the 10 Final Specified Plan Change (SPC) proposals tabled by SC Members for formal consideration at board meetings held in March and April were made in May and June.

Stakeholders were kept informed throughout the process via the SC website and further detail was provided on both the SC and OAC websites and in newsletters once the final decisions had been made. Plan changes were filed with and accepted by the regulators and came into effect January 1, 2011.

Posted September 9, 2010

The SC confirmed contribution increase allocations for 2011; salary examples and more detail are available in the current OMERS newsletter. Rates for 2012 and 2013 will be determined next year, after review of the contribution rate study.

Posted July 14, 2010

The SC received actuarial advice regarding acceptable methods of allocating the contribution increases recently approved for 2011-2013. The Board has not yet reached a final decision and the issue will be reconsidered at the next SC meeting on August 24. The SC also agreed to completion of a contribution rate study in 2011.

Posted July 5, 2010

At SC meetings held on June 21 and 22, the remaining Specified Plan Change proposals were considered. SPC#09-10(b) received more than the required 2/3 majority, thereby approving the following temporary changes to support the funded status of the OMERS Primary Plan:

  • A three-year contribution rate increase for both members and employers, beginning in 2011, following the filing of the 2009 Primary Plan actuarial valuation with regulators this year.
  • Changes to the calculation of benefits members receive if they terminate employment before they're eligible for an early retirement pension. (This only affects benefits based on service earned after 2012.)
  • OMERS pension formula, inflation protection in retirement, survivor benefits and disability benefits are not affected.

Multi-dimensional Approach to Funding Deficit

The changes were undertaken as a temporary strategy to support the funded security of the OMERS Primary Plan. OMERS Primary Plan had a funding shortfall of $1.5 billion at December 31, 2009.

The deficit is expected to increase over the next four years as nearly $5 billion of net losses, mostly from the 2008 global market downturn, are recognized on the balance sheet.

"The SC has a responsibility to manage surpluses and deficits through benefit and contribution rate changes," said Co-Chair Marianne Love. "The changes the SC has approved are the result of careful consideration of the options for addressing the growing deficit."

"The OMERS SC will continue to carefully monitor the Primary Plan's funded status, and to make any decisions on changes through our annual planning cycle," said Co-Chair Brian O'Keefe.

Temporary Contribution Rate Increases

Contribution rates for both active members and employers will increase in 2011 through 2013, as follows:

  • 2011 – effective with the first, full pay in 2011, contribution rates will increase, on average, by 1% per side (employee/employer) as a percentage of a member's earnings.
  • 2012 – effective with the first, full pay in 2012, contribution rates will increase, on average, by an additional 1% per side (employee/employer).
  • 2013 – effective with the first, full pay in 2013, contribution rates will increase, on average, by an additional 0.9% per side (employee/employer).

Once the rates are finalized for 2011-2013, OMERS will inform all Plan members and employers, and provide examples of how the increases will affect their contributions.

Temporary Benefit Calculation Changes

Starting in 2013, these changes will only affect members who terminate employment prior to being eligible for early retirement – i.e., members who terminate before age 55 (normal retirement age 65) or 50 (normal retirement age 60). These changes will not affect any benefits based on service accrued before 2013. OMERS is developing member case examples and cost analyses, and will provide increased detail on these changes and their impact via this website and in our fall newsletters.

Other OMERS SC Plan Decisions

The SC has also committed to taking the following future actions:

  • to elect not to provide "grow-in" rights (optional for plans like OMERS, under Ontario Bill 236), which increase the costs of benefits provided to certain terminating members; and
  • to develop and document protocols and guidelines for future Plan decision-making.

View full text of SPC#09-10(b) 3-Year Multi-Dimensional Approach #2 PDF [43.0 KB]

The proposal to Rescind the Cap on Contributory Earnings was amended [SPC#02-10(a)] to "DEFER Implementation of the Earnings Cap"; neither it nor any of the other proposals received the required 2/3 majority to pass, nor did any move to arbitration. One proposal was withdrawn by the proponent (SPC#10-10) and referred back to committee for further research.

 

2010 SC Member Proposals for Specified Plan Changes

Tabled Apr 20

Amended Jun 8

Last Posted Jun 9

DECISION June 22 - CARRIED

SPC #09-10(b)

 

3-Year Multi-Dimensional Approach #2 

 

Tabled Mar 23

Amended May 20/28

Last Posted May 28

DECISION June 22 - FAILED

(Did not receive 2/3 majority)

SPC #01-10(b)

3-Year Multi-Dimensional Approach #1 

Tabled Mar 23/Posted Mar 25

Amended June 22

DECISION June 22 - FAILED

(Did not receive 2/3 majority)

SPC #02-10(a)

Rescind Cap on Contributory Earnings 

Tabled Mar 23/Posted Mar 25

DECISION June 22 - FAILED

(Did not receive 2/3 majority)

SPC #03-10

NRA 60 - Police Civilians 

Tabled Apr 20/Posted Apr 22

DECISION June 22 - FAILED

(Did not receive 2/3 majority)

SPC #04-10

NRA 60 - Paramedics 

Tabled Apr 20

Amended May 20/Posted May 27

DECISION May 25 - FAILED

(Did not receive 2/3 majority)

SPC #05-10(a)

RCA - Structural Deficit Management 

Tabled Apr 20/Posted Apr 22

DECISION June 22 - FAILED

(Did not receive 2/3 majority)

SPC #06-10

Contribution Increase 1% File 2009 

Tabled Apr 20/Posted Apr 22

DECISION May 25 - FAILED

(Did not receive 2/3 majority)

SPC #07-10

Contributions During Reduced Hours 

Tabled Apr 20

Amended May 20

Last Posted May 27

DECISION June 22 - FAILED

(Did not receive 2/3 majority)

SPC #08-10(a)

5-Year Multi-Dimensional Approach 

Tabled Apr 20

Last Posted Apr 22

June 22-Withdrawn by Proponent

SPC #10-10

RCA Contribution Increase