Value of the PSPP

What's on this page:

    The value of the PSPP... helping you attract and retain top talent

    As an employer, we know that attracting and retaining top talent is a priority for you. The PSPP is an important part of the overall compensation package you offer your employees and making sure your employees and potential employees know just how valuable membership in the PSPP is to them, can help position you as an employer of choice and give you a competitive edge.

    As a defined benefit (DB) plan, the PSPP offers members a pension that is based on a pre-set formula that is payable for life - so members know what their pension will be at retirement and have the security of knowing that they can't outlive it.

    What does the PSPP offer my employees?

    The PSPP offers your employees many benefits that not all pension plans provide, including:

    • Security... Income members can count on
    • Helping build adequate retirement income
    • Investment expertise
    • Inflation protection... Maintaining your purchasing power in retirement
    • Insured benefits
    • Early retirement
    • Survivor benefits
    • Disability

    How can I use the PSPP to recruit top talent?

    Educating potential employees about the many valuable benefits of membership in the PSPP can help you attract top talent to your organization. Read on for a few tips...

    Recruiting... the PSPP can give you a competitive edge

    Establishing yourself as an employer of choice starts with how you position your organization in job ads, in your career/jobs section on your website, at job fairs, etc.

    Regardless of the vehicle, when you've got the undivided attention of potential employees, why not take full advantage of the opportunity and communicate more than just the jobs you have available. Talk to them about everything your organization offers them - including membership in the PSPP - a first-rate defined pension plan that provides them with many valuable features and a high degree of financial security. By offering your employees membership in the PSPP, you're helping to provide for them during their working years and during their retirement.

    You could include information about the PSPP and the benefits it offers on your website. We have a two-page piece titled The value of your Public Service Pension Plan, that you can put up on your career/job section of your website and bring with you to job fairs.

    The job offer... educate the candidate about the PSPP

    When you're presenting a job offer, make sure the candidate understands the many benefits that membership in the PSPP would offer them by walking them through the benefits and including our two-page The value of your Public Service Pension Plan piece in the offer package.

    How can I use the PSPP to retain top talent?

    Educating potential employees about the many valuable benefits of membership in the PSPP is critical, but it's just as important to make sure your current employees understand how the pension plan works and are aware of the benefits their membership offers them. After all, if your employees aren't aware of the true value the pension plan you offer them, you won't be able to maximize the plan's power to help you retain your employees. Read on for a few tips...

    Use your HR Intranet

    Today, many employers have an HR Intranet to communicate important information to employees about their benefits, you could use this vehicle to help promote the PSPP and the value it offers your employees. Again, this is a great place to use our two-page piece The value of your Public Service Pension Plan, that walks members through the key benefits of membership.

    Invite OPB to present the value of the plan to your employees

    We are out on the road presenting to members all year long and would be happy to come out to your offices to meet with your employees and walk them through the value of being a PSPP member, how the plan works, and of course, to answer their questions.

    Our presentations are customized to meet each individual employer's needs - we work with your schedule and customize a presentation for your employees.

    A closer look at the benefits of the PSPP

    The PSPP offers your employees:

    Security... Income members can count on

    As a member of a defined benefit plan, members can take comfort in knowing their pension is payable for life. There is no chance they will outlive their pension.

    Helping build adequate retirement income

    Mandatory participation in the Plan ensures that members build an adequate retirement income over time. Their pension is calculated using the average of their highest 60 consecutive months of earnings during their Plan membership.

    If a member transfers pension credit into the PSPP, their past and current memberships will be combined to determine their average annual salary.

    Investment expertise

    As members of a defined benefit pension plan, our members can rest assured that investment decisions affecting your pension are being made by investment specialists who have the expertise and experience necessary to generate the returns needed over the long-term to fund the pension promise.

    Inflation protection... Maintaining purchasing power in retirement

    A PSPP pension is indexed to inflation annually. This extremely valuable benefit helps ensure that our members' purchasing power remains strong throughout their retirement.

    To help you and your employees understand the powerful impact of this benefit, let's take a look at what would happen to a $36,000 annual pension without this inflation protection. This example assumes inflation is at 2.5%.

    Buying Power of a $36, 000 annual pension at 2.5% inflation

    After 10 years $36,000 = $28,000 (22% less buying power) 
    After 20 years $36,000 = $22,000 (39% less buying power) 
    After 28 years $36,000 = $18,000 (50% less buying power)

    Without inflation protection, the purchasing power of a pension can be very quickly eroded.

    With a PSPP Pension, the member retains full purchasing for life.

    Insured benefits

    Keeping up with rising healthcare costs in retirement can be extremely expensive. But eligible PSPP members can take comfort in knowing that they have access to medical, dental, and basic life insurance coverage in retirement.

    On February 18, 2014 the Government of Ontario announced changes to the post-retirement insured benefits (medical, dental and basic life insurance coverage) it offers to the Ontario Public Service. These changes are effective January 1, 2017. For more information about eligibility for insured benefits and these changes, please read  Government of Ontario announces changes to post-retirement insured benefits (PDF).

    Early retirement

    A member's normal retirement date is their 65th birthday. However, the PSPP has early retirement provisions that allow members to retire with an unreduced pension if their age and service equals 90 points (Factor 90), or if they're at least 60 years old and have 20 years or more of credited service (60/20).

    Survivor benefits

    We understand that for our members, making sure their loved ones are well taken care of in the event of their passing is very important. The PSPP includes provisions to help provide for eligible spouses or eligible children in the event of the member's death.

    Disability

    The PSPP helps protect members against the unexpected - including developing a total and permanent disability. The PSPP provides a disability pension or termination benefits to members who qualify.

    For more information about the value of your defined benefit PSPP plan for employees, please see The value of your Public Service Pension Plan.