Early Retirement

Modify the early retirement subsidies

The OMERS Plan provides valuable subsidies to eligible long-service members who retire before their normal retirement age or “NRA” (age 65 for most members and age 60 in the case of Police and Fire). The proposal is to retain early retirement subsidies, but to update the Plan slightly to address emerging retirement patterns and our aging membership.

Current

  • Unreduced pensions paid from 10 years prior to NRA, provided:
    • you have at least 30 years of service, or 
    • your age and service equal 90 points (85 points for Police and Fire)
  • Your pension is reduced by 5% per year or point that you retire before attaining 30 years of service, 90 (85) points or your NRA
  • Service/points based on “eligible” service

Proposed

  • Unreduced pensions paid from 5 years prior to NRA, provided:
    • you retire with at least 30 years of service, or 
    • your age and service equal 90 points (85 points for Police and Fire)
  • If you retire:
    • more than 5 years from your NRA: your pension will be subject to an actuarial reduction 2
    • within 5 years of your NRA: the current provisions apply
  • Service/points based on “contributory” service
Eligible service: Service with any OMERS employer that isn’t credited service. 
Actuarial reduction: A reduction to reflect the value of receiving the pension earlier, and longer, than if it were paid from normal retirement.
Contributory service: The period over which you have made contributions or were deemed to have made contributions to the Plan. 

Rationale

The most recent data confirms that the average member joins the Plan at age 37 and earns 11 years of service. This means that fewer and fewer members will actually qualify for unreduced early retirement in the years ahead. As such, they are actually paying for benefits that they won’t ever qualify to receive.
 
The data also confirms that a growing number of members are delaying their retirement – even when they qualify for early retirement subsidies.

Next: Eliminate the current 35-year cap for credited service

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