Glossary

A member’s 24-month costing window for buybacks is 24 months from the date:

• a leave of absence ended
• the member joined the PSPP (or in some cases, the OPSEU Pension Plan, the Agricorp Plan, the TVO Plan, or the Ontario Northland Plan)
• a legal strike, lockout, or temporary layoff due to legal strike or lockout ended
• the member received notification of a shortfall resulting from transferring pension credit into the PSPP

OPB may occasionally establish other buyback costing windows.

This buyback costing method determines the amount of money we would need to set aside today to fund the additional pension benefits to which a member would be entitled at retirement if they completed the buyback. The calculation takes into account a number of factors, including the member’s age, pension credit and salary, and uses the actuarial assumptions and standards in place on the date of calculation, including assumptions about salary increases and mortality. Generally, actuarial cost increases over time.

Regular members: the average of the member’s annual salary for their best 60 consecutive months of PSPP membership.

OPP officers: the average of the member’s annual salary for their best 36 consecutive months of PSPP membership.

OPP civilians: the average of the member’s annual salary for their best 48 consecutive months of PSPP membership.

Associate judges: For service as an Associate Judge, the average of their annual salary for their best 36 consecutive months of PSPP members. For all other service, their best 60 consecutive months.

If you have not been a PSPP member for the applicable number of months, your entire membership will be used.

If you transfer pension credit into the PSPP from another plan, your period of membership in the other plan will be combined with your PSPP membership to determine your average annual salary.

A mandatory earnings-related pension plan for workers in Canada.

Refers to how the PSPP and CPP work together during your working years, early retirement, and after age 65. Your PSPP pension consists of:

• a lifetime pension, paid from your retirement date for your lifetime; and
• an early retirement bridge benefit, paid from your retirement date to age 65.

At age 65, the early retirement bridge benefit ends. The bridge benefit is intended to supplement your retirement income until age 65 when you are eligible for an unreduced CPP pension.

A lump-sum that represents the present day dollar value of your accrued pension.

An adjustment made to a pension to protect the buying power of the pension against inflation.

The PSPP’s annual COLA is calculated by dividing the average Consumer Price Index (CPI) for the 12-month period ending in September of the previous year by the average CPI for the 12-month period ending in September of the year before the previous year. The maximum COLA in any year is 8% with any excess being carried forward to future years.

A pension a member can collect at a later date, provided they leave their pension credit in the Plan when they end their membership.

A named beneficiary who may be eligible to receive a benefit from the PSPP when a member dies.

A member’s child, who:

• is found by OPB to have a continuing mental or physical disability, and
• was, by reason of that disability, financially dependent on the member at the time of their death.

A disabled dependant child is considered an eligible child under the Plan and may qualify for a survivor pension on the member’s death.

An eligible child is a member’s child who is under age 18, or 18 or older and attending school on a continuous, full-time basis (up to 5 years at post-secondary school). An eligible child also includes a disabled dependant child.

A member’s eligible spouse qualifies for a survivor pension or other benefit from the PSPP after the member’s death. The definition of “eligible spouse” depends on whether death occurs before or after retirement.

Before retirement

A member’s spouse at the date of their death is their eligible spouse.

After retirement

A member’s spouse on the first day of the month when their pension starts is their eligible spouse.

If a member establishes a spousal relationship after retirement, the post-retirement spouse is not eligible for a survivor pension unless the member applies and is approved for this benefit.

For members who retired before 1988, the above definition does not apply. Contact OPB for details.

Or Immediate Pension, is a pension that starts before age 65 and is subject to an age reduction. With the age reduction, pension is reduced by 5% for each year (and pro-rated for a partial year) the member is under 65. For example, a pension starting at age 60 is reduced by 25% (5% x 5 years under 65).

Requirement: Member must be age 55 or older and not eligible for an immediate unreduced pension (subject to small pension rules).

Medical, dental and basic life insurance benefits provided in retirement to members who satisfy certain eligibility requirements.

OPP members may qualify for insured benefits from the Ontario Provincial Police Association (OPPA). Contact OPPA for more information at 1-800-461-4282.

The marital status we have on record for you. If this is not correct, please contact OPB.

If you have an eligible spouse (as defined by the Plan) when you start collecting your pension from the PSPP, that pension will include a joint and survivor pension. The joint and survivor pension which is required by law under Ontario's Pension Benefits Act means your eligible spouse will be entitled to a lifetime pension after you die, equal to 60% of your pension. To help offset the cost of paying this survivor pension to your spouse, the pension you receive will be actuarially reduced.

An increased survivor pension will reduce the pension you receive during your lifetime. If your spouse predeceases you or your spousal status changes, you will continue to receive the reduced pension. The reduction takes into account your age and your spouse's age when your pension starts.

You and your spouse can waive some or all of the 60% joint and survivor pension. If you both waive the joint and survivor pension, the pension you receive will not be reduced to cover the cost of paying a pension to your eligible spouse after your death.

The amount of pension credit you need to purchase to qualify for post-retirement insured benefits.

• If you're a regular full-time employee, when you retire you will be entitled to receive medical, dental and basic life insurance benefits if you satisfy the eligibility requirements.
• If you're a seasonal or regular part-time employee, you must have continuous employment with pension credit in each of your qualifying years to be eligible for insured benefits. Buying back pension credit can help you reach the amount of pension credit you need to qualify for insured benefits in retirement. The Minimum purchase required to qualify for Post-retirement Insured Benefits information does not display in your estimate if you are an unclassified, seasonal or regular part-time employee since special calculations apply. If this applies to you and you want to know if you can purchase pension credit to qualify for post-retirement insured benefits, please contact OPB directly for more information.
• OPP/OPPA members receive insured benefits from the Ontario Provincial Police Association (OPPA). Contact OPPA for more information at 1-800-461-4282

Please note: In 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 came into effect 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).

Annual pension before age 65: 2% x average annual salary x pension credit

At age 65 the pension above is reduced by the following formula: 0.7% x (lesser of average annual salary and Average YMPE) x pension credit up to 35 years

A pension that starts before age 65 and is subject to an age reduction. With the age reduction, a member’s pension is reduced by 5% for each year the member is under 65 (and pro-rated for a partial year). For example, a pension starting at age 60 is reduced by 25% (5% x 5 years under 65).

A member must be age 55 or older to receive a reduced pension (subject to small pension rules). Note that there is no age reduction where a member is eligible for an unreduced pension.

The Plan provision under which a member retires. The retirement options are:

When a member’s employment ends, their pension is considered a small pension if, in the year their employment ended:

• their annual pension is equal to or less than 4% of the Year's Maximum Pensionable Earnings (YMPE), or
• the commuted value of their pension is less than 20% of the YMPE.

If a member has a small pension and they:

• do not qualify for insured benefits in retirement, they will receive a lump-sum payment from the Plan
• do qualify for insured benefits, they will have the option of a pension or a lump-sum payment from the Plan.

Under the PSPP, a “spouse” is either of two persons who,

• are married to each other, or
• are not married to each other and are living together in a conjugal relationship,
  • continuously for a period of not less than three years, or
  • in a relationship of some permanence, if they are the parents of a child as set out in section 4 of the Children’s Law Reform Act.

A pension paid to an eligible spouse or eligible child after a member's death. Survivor pensions are payable for an eligible spouse's lifetime or until the child no longer meets the age, educational, or disability requirements. Survivor pensions receive annual cost-of-living adjustments every January.

For more information on death benefits, please read our booklet, Planning today for tomorrow (PDF).

A pension that is not subject to an age reduction. A member can receive an unreduced pension at age 65 or under one of these early retirement provisions if they have the required combination of age and pension credit.