Normal Retirement Age

Most members have aof 65. Most police and firefighter members have a normal retirement age of 60.

An OMERS employer elects to provide the normal retirement age 60 benefit to its police and firefighter members – the benefit is not automatically provided by OMERS to police and firefighters.


The Basics

Your normal retirement age affects:


1. The earliest age you can start your pension.

You can start your pension within 10 years of your normal retirement age:

  • If your normal retirement age is 65, you can retire as early as age 55.

  • If your normal retirement age is 60, you can retire as early as age 50.

EXAMPLE

Joe is 52 years old and has a normal retirement age of 60. He meets the OMERS age requirement for early retirement and he can start his pension immediately. If Joe’s normal retirement age were to change to 65, he would have to wait until he turns age 55 before he could start his pension.


2. When you qualify for an unreduced early retirement pension.

If your normal retirement age is 65, you qualify for an unreduced pension at age 65, regardless of your service, or if you are at least age 55 and:

  • You have 30 years or more of service*; or

  • Your age + your service* = 90 (the "90 Factor")

If your normal retirement age is 60, you qualify for an unreduced pension at age 60, regardless of your service, or if you are at least age 50 and:

  • You have 30 years or more of service;

  • or Your age + your service = 85 (the "85 Factor")

*Includes credited plus eligible service.


3. The amount of your pension, if you retire early with a reduced pension.

EXAMPLE

Sue is age 59, she has 26 years of service and her normal retirement age is 60. Sue qualifies for an immediate unreduced pension because her age plus service equals 85 (59 + 26 = 85).

If Sue’s normal retirement age were to change to 65, she would no longer qualify for an immediate unreduced pension – she does not have the 90 Factor or 30 years of service. (Note: She could still retire early if her normal retirement age changed to 65 because she is over age 55, but her pension would be reduced.) Sue would have to work another 2.5 years to qualify for a 90 Factor unreduced pension (61.5 + 28.5 = 90).

Note: The formula to calculate retirement and disability pensions, inflation protection and survivor benefits is the same for both normal retirement age 60 and 65 members – normal retirement age does not affect the pension formula, survivor benefits or inflation protection.


Normal retirement age and commuted value transfers

Normal retirement age may affect your ability to transfer the commuted value of your pension.

If you leave your OMERS employer, the option to transfer the commuted value of your OMERS pension to a locked-in retirement account (LIRA) or registered pension plan (RPP) ends the day before your early retirement birthday (age 55 for normal retirement age 65, age 50 for normal retirement age 60).


Normal Retirement Age Conversion

A member’s normal retirement age can change when:

  • The member moves to another OMERS employer or changes their occupation within an OMERS employer, e.g., if a normal retirement age 65 member becomes a police officer in a group with normal retirement age 60, the member’s normal retirement age will change from 65 to 60; or

  • The member’s employer passes a bylaw or resolution to change the normal retirement age for a class of employee. The change must be made for all, or a class of, police officers or firefighters of the employer (not individuals). This is the case for both normal retirement age changes – 65 to 60 and vice versa.


Normal Retirement Age Conversion: 60 to 65

If yourchanges from 60 to 65:

  • You are immediately entitled to benefits available to normal retirement age 65 members.

  • You begin to pay normal retirement age 65 rates – the rates are lower than normal retirement age 60 rates.

  • Your excess member contributions are refunded with interest paid at the CANSIM rate. Excess member contributions are past contributions made when your normal retirement age was 60 minus the amount you would have otherwise contributed with a normal retirement age of 65.


Examples

Jane is 52 years old, has 30 years of, has a normal retirement age of 60 and could retire this year.

If Jane’s normal retirement age changes to age 65:

  • The earliest age she could retire would now be age 55.

  • Her employer would immediately start to deduct contributions at the lower normal retirement age 65 rate.

  • For her past 30 years of credited service, excess member contributions made at the normal retirement age 60 rate, plus interest, would be refunded.

  • When she retires, her pension amount would be based on years of credited service at retirement (up to a maximum of 35 years). For example, if she retires at age 55 with 33 years of credited service, 33 years of credited service would be used to calculate her pension.

Tom is 48 years old, has 21 years of credited service and a normal retirement age 60. He plans to retire at age 57 when he will have 30 years of service and a normal retirement age of 60.

If Tom’s normal retirement age changes to 65:

  • His employer would immediately start to deduct contributions at the lower normal retirement age 65 rate.

  • For his past 21 years of credited service, excess member contributions made at the normal retirement age 60 rate, plus interest, would be refunded.

  • He can still retire at age 57 with an unreduced pension – because the minimumage requirement of 55 is met and he will have 30 years of service.

  • His pension amount would be based on years of credited service at retirement (up to a maximum of 35 years). In this case, this is 30 years of credited service if he retires at age 57.


Normal Retirement Age Conversion: 65 to 60

If yourchanges from 65 to 60:

  1. You immediately begin to pay normal retirement age 60 contribution rates.

  2. You are immediately entitled to normal retirement age 60 benefits if you retire or leave your OMERS employer.

  3. OMERS applies an adjustment to your past– your past credited service is reduced by up to 25% because you are now entitled to normal retirement age 60 benefits.

  4. OMERS provides you with a package detailing the service adjustment, the cost to buy the service adjustment and an election form and instructions for purchasing the service adjustment. (Note: The conversion cost is valid for six months. After six months, the cost expires. If you still wish to buy the service adjustment, you would have to request an updated cost which could be higher or lower.)

If yourchanges from 65 to 60, OMERS reduces your pastby 25%, unless:

  • You are over age 60 – in this case, the reduction is 5% for each year you are less than age 65.

  • You are age 55 or older and have 30 years of service* or the 90 Factor (age plus service* equals 90) – in this case, you qualify for both an unreduced normal retirement age 65 pension and an unreduced normal retirement age 60 pension and there is no service adjustment or payment required.

*Includes credited plus eligible service.

EXAMPLES

If the member is age 55 and has 20 years of credited service, the service adjustment will be a 25% reduction.

If the member is age 55 and has 30 years of credited service, the service adjustment will be none (because the member is eligible for an unreduced normal retirement age 65 pension).

If the member is age 62 and has 20 years of credited service, the service adjustment will be a 15% reduction (5% for each of the three years the member is less than age 65).

The cost to buy the service adjustment related to60 conversion will change as you get older.

  • Generally speaking, the cost will increase as you approach the age you become eligible for an unreduced normal retirement age 60 pension (Note 1). Then, the cost typically starts to decrease and will reduce to zero around the age you become eligible for an unreduced normal retirement age 65 pension (Note 2). 

  • The cost is based on a number of variables, including your age and salary and the actuarial assumptions in effect at the time the calculation is performed. A change to any of these variables may increase or decrease the cost.

OMERS automatically restores any service adjustment still on your record if you are still anwhen the cost has reduced to zero.


Example

After working as a civilian for 10 years, Todd became a police officer and his normal retirement age changed from 65 to 60. As a result of the normal retirement age conversion, an adjustment was applied to his normal retirement age 65. His credited service was reduced by 2.5 years. Todd did not buy the 2.5-year service adjustment. When Todd turned 58, the cost to buy the service adjustment had reduced to zero. Since he was still working as a police officer at this point, OMERS automatically restored the 2.5 years of credited service and provided Todd with a notice and updated credited service record.

Note 1 You are eligible for an unreduced normal retirement age 60 pension at age 60, regardless of your service, or when you are at least age 50 and you have 30 years of service* or the 85 Factor (age + plus service* = 85). 

Note 2 You are eligible for an unreduced normal retirement age 65 pension at age 65, regardless of your service, or when you are at least age 55 and you have 30 years of service* or the 90 Factor (age + plus service* = 90). 

*Includes credited plus

You can buy the service adjustment as long as you are an.


What am I buying?

When yourchanges from 65 to 60, OMERS applies an adjustment to your past. Your past credited service is reduced by up to 25% because you are now eligible for normal retirement age 60 benefits if you retire or leave your OMERS employer. You are buying the service adjustment and converting it into normal retirement age 60 credited service.

Example

  • Dev is 45 and has 20 years of credited service when his normal retirement age changes from 65 to 60.

  • An adjustment is applied to his normal retirement age 65 credited service and his credited service is reduced by 5 years.

  • Dev now has 15 years of normal retirement age 60 credited service.

  • Dev can buy none, some or all of the 5-year service adjustment and convert it into normal retirement age 60 credited service.


What happens if I don’t buy the service adjustment?

1. The service adjustment counts as, even if you don’t buy it.

Example

If Dev in the above example does not purchase the 5-year service adjustment and convert it into normal retirement age 60 credited service, it would count as 5 years of eligible service.

2. You can choose to buy none, some or all of the service adjustment. Whatever you decide, please note that the cost is valid for six months. If you do not make your election or pay for the service adjustment by the expiry date on the election form, you can contact OMERS Member Services to request an updated cost.

3. The cost to buy the service adjustment changes as you get older:

  • Generally speaking, the cost will increase as you approach the age you become eligible for an unreduced normal retirement age 60 pension. Then, the cost typically starts to decrease and will reduce to zero around the age you become eligible for an unreduced normal retirement age 65 pension.

  • The cost is based on a number of variables, including your age and salary and the actuarial assumptions in effect at the time the calculation is performed. A change to any of these variables may increase or decrease the cost.

4. OMERS automatically restores any service adjustment if you are an active member when the cost has reduced to zero.

5. If you retire or leave your OMERS employer and you still have a service adjustment on your record, you are given a final opportunity to buy it. (This opportunity is not available to your survivors in the event of your death.)


Why buy the service adjustment when:

  • the cost may decrease at some time in the future?

  • OMERS automatically restores the service adjustment if the cost reduces to zero while I’m still an active member?

Buying the service adjustment is similar to buying insurance. For example, many people buy home insurance and never claim on it. Although there is no refund of premiums for not making a claim, they continue to buy the insurance to protect themselves against future events they can’t predict. For the same reason, you can’t always predict when you will retire or terminate employment from your OMERS employer or you may become disabled or die before the cost of the service adjustment starts to decrease.

If you buy the service adjustment (either now or at some future date), the extra credited service will be added to your record immediately with the purpose of providing a higher benefit in the event of your retirement, termination from your OMERS employer, disability or death. However, the risk of purchasing the service adjustment is similar to purchasing insurance – there would be no refund of your payment if you continue to work to a point when the cost reduces to below what you paid or may even reduce to zero.


What are my payment options?

Your payment options include:

  • Personal cheque payable to OMERS (OMERS will issue a tax receipt for the payment received). 

  • Transfer from a registered retirement savings plan (RRSP) or locked-in retirement account (LIRA). 

  • Transfer from another registered pension plan (RPP). 

  • Withdrawal from your OMERS Additional Voluntary Contributions (AVC) account.


Can I buy the service adjustment after my pension starts?

No, you cannot buy the service adjustment after your pension starts.


Can I get my money back if I change my mind after paying for the service adjustment?

No, the purchase is irreversible. Keep in mind that purchasing the service adjustment is similar to purchasing insurance – if you continue to work to a point when the cost would have otherwise reduced to below what you paid or may even reduce to zero, there would be no refund of your payment.


How can I request a cost to buy the service adjustment?

OMERS automatically provides a cost at the time your normal retirement changes from 65 to 60. The cost is valid for six months. After six months, the cost expires. If you still wish to buy the service adjustment, you would have to request an updated cost which could be higher or lower.

Case Study 1

Judd is working for a local municipality when he becomes a firefighter and hischanges from 65 to 60. He is 45 years old and has 21 years ofin the OMERS Primary Pension Plan (OMERS Plan).

How does this affect Judd?

  • For future service, Judd’s employer would deduct contributions at the higher normal retirement age 60 rate.

  • For past service, OMERS would apply an adjustment (25% reduction or 5.25 years) due to the normal retirement age conversion.

    • Judd would now have 15.75 years of normal retirement age 60 credited service (21 – 5.25 = 15.75 years).

    • OMERS would send Judd a package detailing the service adjustment, the cost to restore the service adjustment and an election form and instructions. Judd can buy none, some, or all of the 5.25 years of service.

  • If Judd buys the service adjustment he will have 5.25 more years of normal retirement age 60 credited service.

  • If he doesn’t buy the service adjustment:

    • He will have 15.75 years of credited service plus 5.25 years of.

    • He can request an updated cost and buy the 5.25 years of service anytime before he retires.

    • The cost to buy the 5.25 years of service will change as Judd gets older:

      • Generally speaking, the cost will increase as he approaches the age he becomes eligible for an unreduced normal retirement age 60 pension (Note 1). At this point, the cost starts to decrease and reduces to zero around the age he is eligible for an unreduced normal retirement age 65 pension (Note 2).

      • The cost is based on a number of variables, including Judd’s age and salary and the actuarial assumptions in effect at the time the calculation is performed. A change to any of these variables may increase or decrease the cost.

    • If Judd is anwhen there is no cost to buy the service adjustment, OMERS automatically restores the credited service.

  • Buying the service adjustment is similar to buying insurance. If Judd buys the service adjustment, the credited service is added to his record immediately with the purpose of paying a higher benefit in the event of his death, retirement, disability or termination from his OMERS employer. However, if he continues to work to a point when the cost would have otherwise reduced to below what he paid or the cost may even reduce to zero, there would be no refund of his payment.


Case Study 2

Jane, a civilian working for the local police department, becomes a police officer and her normal retirement age changes from 65 to 60. She is 40 years old and has 11 years of credited service in the OMERS Plan.

How does this affect Jane?

  • For future service, Jane’s employer would deduct contributions at the higher normal retirement age 60 rate.

  • For past service, OMERS would apply an adjustment (25% reduction or 2.75 years) due to the normal retirement age conversion.

    • Jane would now have 8.25 years of normal retirement age 60 credited service (11 – 2.75 = 8.25 years).

    • OMERS would send Jane a package detailing the service adjustment, the cost to restore the service adjustment and an election form and instructions. Jane can buy none, some, or all of the 2.75 years of service.

  • If Jane buys the service adjustment she will have 2.75 more years of credited service.

  • If she doesn’t buy the service adjustment:

    • She will have 8.25 years of credited service plus 2.75 years of eligible service.

    • She can request an updated cost and buy the 2.75 years of service anytime before she retires.

    • The cost to buy the 5.25 years of service will change as Jane gets older:

      • Generally speaking, the cost will increase as she approaches the date she becomes eligible for an unreduced normal retirement age 60 pension (Note 3). At this point, the cost starts to decrease and reduces to zero around the date she is eligible for an unreduced normal retirement age 65 pension (Note 4).

      • The is based on a number of variables, including Jane’s age and salary and the actuarial assumptions in effect at the time the calculation is performed. A change to any of these variables may increase or decrease the cost.

    • If Jane is an active member when there is no cost to buy the service adjustment, OMERS automatically restores the credited service.

  • Buying the service adjustment is similar to buying insurance. If Jane buys the service adjustment, the credited service is added to her record immediately with the purpose of paying a higher benefit in the event of her death, retirement, disability or termination from her OMERS employer. However, if she continues to work to a point when the cost would have otherwise reduced to below what she paid or the cost may even reduce to zero, there would be no refund of her payment.

Note 1 Jane will have an 85 Factor unreduced normal retirement age 60 pension at age 57. 

Note 2 Jane she will have 30 years of service* and she will be eligible for an unreduced retirement age 65 pension at age 59. 

Note 3 Judd will have 30 years of service* and will be eligible for an unreduced normal retirement age 60 pension at age 54. 

Note 4 Judd will be eligible for an unreduced normal retirement age 65 pension at age 55. 

*Includes credited plus eligible service.