50% Rule Refund
When you leave your employer, you start your OMERS pension, or if you die before your pension starts, a test is applied to ensure that your contributions on or after January 1, 1987 do not exceed 50% of the commuted value (CV) of your pension over the same period. Any excess contributions will be refunded to you, your beneficiary, or your estate, as applicable.
AYMPE
The five-year average of the year’s maximum pensionable earnings (YMPE) determined at the time of a benefit calculation.
“Best five” earnings
The annual average of the 60 consecutive months during which your contributory earnings were at their highest. It does not include any overtime pay or most lump-sum payments. It may, however, include earnings from a period of service that was transferred in from another registered pension plan. If you have less than five years of credited service, we use your contributory earnings over your entire period of credited service to calculate your average earnings.
Buy-back
Buying back previous service that is eligible for a buy-back converts it to credited service in the OMERS Plan. The previous service could be service with an OMERS employer that currently doesn’t count as credited service or refunded service with another pension plan.
Canada Pension Plan (CPP) earnings limit
The maximum amount of earnings used to calculate contributions and pensions under the Canada Pension Plan (CPP). Also called the year’s maximum pensionable earnings (YMPE).
Common-law spouse
OMERS considers a common-law spouse to be a person who is not married to the member but living together with the member 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. To be eligible for spousal survivor benefits, a common-law spouse cannot be “living separate and apart” (see definition below) from the OMERS Plan member at the relevant time.
Commuted value (CV)
The commuted value is the estimated amount of money you would have to put aside today, to grow with tax-sheltered investment earnings, to provide you with a future benefit similar to the OMERS pension you’ve earned at the relevant time.
Continuous full-time
You are a continuous full-time member if you are a permanent, full-time employee who is regularly scheduled to work over the full calendar year and works at least 32 hours a week.
Early retirement birthday
Your early retirement birthday is the day you reach:
age 55 if your normal retirement age is 65; or
age 50 if your normal retirement age is 60
Eligible dependent child
OMERS considers an eligible child to be:
a natural child;
a legally adopted child; or
a person whom you have demonstrated a settled intention to treat as a child of your family (except under an arrangement where the child is placed for valuable consideration in a foster home by a person having lawful custody).
At the time of your death, the eligible child must be dependent on you for support and also must be:
18 years or younger in the year of your death;
under age 25 and a full-time student; or
totally disabled (see definition of “Totally disabled child”).
Legal spouse
OMERS considers a legal spouse to be a person who is legally married to the member. To be eligible for spousal survivor benefits, a legal spouse cannot be “living separate and apart” (see definition below) from the OMERS Plan member at the relevant time.
Living separate and apart
Whether two persons are “living separate and apart” is often complicated to assess. It is a question of both fact and law, and must be determined on a case-by-case basis. OMERS uses a number of factors to make this determination in accordance with applicable statutory and common law requirements. In general, physical separation is usually, but not always, an indication that two persons are living separate and apart. However, physical separation is not always conclusive. There must also be a mutual or unilateral intention for two persons to live separate and apart and end the marriage or common-law relationship. For example, a physical separation between two spouses caused by one of them living in a nursing home will not necessarily result in a determination that the spouses are living separate and apart, provided that both spouses intended the marriage or common-law relationship to continue despite the physical barrier
Locked-in
When your pension is “locked-in,” you must use it for future retirement income. You cannot cash it out, except in very specific cases allowed by applicable legislation and the OMERS Plan text. The pension benefits you accrue are immediately locked in when you join the OMERS Plan.
Non-full-time [referred to as other-than-continuous full-time (OTCFT) in the OMERS Plan text]
Non-full-time members may include members who work less than a full-time work week or less than a full calendar year. They can be short-term, casual, temporary, seasonal, student, part-time, 10-month or contract employees.
Normal retirement age
Most members in the OMERS Plan have a normal retirement age of 65. Many police and firefighters, including firefighters or police who become employed by a participating police or fire association, have a normal retirement age of 60 (NRA 60). Effective January 1, 2021, an employer will have the option to provide normal retirement age 60 (NRA 60) benefits to all or a class of paramedics. For unionized employees, NRA 60 benefits are subject to negotiation between employers and unions
Normal retirement date
Your normal retirement date is the end of the month in which you reach your normal retirement age.
OMERS Fund net rate of return
The OMERS Fund rate of return less investment management expenses.
Post-retirement-date spouse
If you enter into a spousal relationship after retirement, and there is no person who qualifies as your retirement-date spouse (see definition), OMERS considers the surviving legal spouse or common-law spouse at the date of your death to be the eligible spouse for the purpose of spousal survivor benefits, provided you were not “living separate and apart” (see definition) on the date of your death and the rights to survivor benefits have not been waived
Retirement compensation arrangement
A portion of your OMERS pension with respect to service after 1991 may be paid by the OMERS retirement compensation arrangement (RCA) if your earnings exceed the amount that generates the maximum pension allowed by the Income Tax Act (ITA). This determination is made when you terminate employment or retire. The RCA is a trust arrangement separate from the Primary Plan, and is not governed by the Pension Benefits Act nor is it a Registered Pension Plan under the ITA. The RCA is governed by the OMERS Act, the ITA and other applicable legislation. It is funded on a partial pay-as-you-go basis by equal contributions from participating employers and active members and by the investment earnings of the RCA fund.
Total contributions OMERS receives are allocated between the Primary Plan Fund and the RCA Fund in accordance with the Allocation Threshold, which is the level of contributory earnings below which your related contributions are directed to the Primary Plan Fund and above which they are directed to the RCA Fund. The Allocation Threshold is set each year by the OMERS Sponsors Corporation, based on calculations by the OMERS external actuary. More details about the Allocation Threshold are available in the funding policy for RCA (available on omers.com).
OMERS annually determines contributions to target sufficient funding. The target aims to ensure that the RCA fund, future contributions, and future investment earnings are sufficient to pay projected benefits and expenses over a 20-year period.
