Pension clean-up deal finds cash for OPT plan
members
If your pension is funded by the OPSEU Pension Trust (OPT), you may
have some cash coming.
Under a settlement negotiated by OPSEU, the Ontario government is
set to pay out millions of dollars to correct errors in plan members’
files. Thousands of files are being updated. Many plan members will
make money as a result.
The cost to individual members? Zero.
“This agreement underlines, yet again, the power of joint
trusteeship,” said OPSEU president Leah Casselman. “This deal
never could have happened if OPSEU members had not fought for - and
won - joint control of their pension dollars.”
The problem: management error
When the OPSEU Pension Trust was set up in 1995, both sides knew
that many members’ records contained incorrect data. In some cases,
managers:
- recorded the wrong start date for employees;
- wrote employees down as full-time when they were part-time, and
vice versa;
- failed to record leaves of absence, or failed to record when
people returned from leaves;
- recorded regular pension contributions incorrectly;
- failed to deduct the contributions when employees agreed to a
buy-back of past service, OR deducted the contributions but
did not record the service credit;
- credited members with too much service; or
- made other mistakes.
The solution: “data purification”
As part of the agreement that set up the plan, the government set
up a “data purification project” to fix the problem. It has taken
a long time: the project involves going into every individual file. So
far, 30,854 files have been checked. Of those, 15,197, or 49.25 per
cent, have required some adjustments.
The full project, covering 50,000 active plan members and 15,000
pensioners, must be wrapped up by the end of the year.
The result: a win-win deal for OPSEU members
OPSEU and the government filed briefs at arbitration in March.
Since the errors were management’s, the union argued, successfully,
that there was no reason plan members should pay to correct them. As a
result, the settlement signed last month says that:
- Plan members who have over-contributed
to their pension in
the past will get their money back - with interest. In some cases
this could mean thousands of dollars.
Plan members who have under-contributed at any time before
Dec. 31, 1998 will not have to pay more to make up the shortfall. They
will keep the service they thought they were buying or had
agreed to buy. This applies to regular pension contributions and
buybacks. Disputes over whether there was an “agreement to purchase”
will be dealt with by expedited arbitration.
Plan members who paid back past under-contributions prior to
Dec. 31, 1998 after receiving a letter from the OPT will get a refund
of the amount they paid back.
All aspects of the agreement apply equally to retirees and
active members.
Unfortunately for some, plan members cannot keep credits given by
mistake for service they did not work. It’s against the law.
You will receive a letter from the OPT if information in your file
changes. Plan members whose information was already correct will not
be contacted.
Find out more
The full text of the “data purification project” settlement is
available on the OPSEU web site at http://www.opseu.org/benefit/settlement.pdf.
For other information, contact the OPSEU Pension Trust at
1-800-906-7738.
Is your window open????
Some buybacks still possible
Some OPSEU members want to buy back pension credits for time they
worked in the past. It is still possible for some people.
A recent decision by the OPSEU Pension Trust says that the 24-month
window does not close IF:
- you put in an application to buy back service during your
24-month period AND
- you received an “offer to purchase.”
Some plan members applied to buy back service but then decided not
to when they found out how much it would cost. Years later, jobs in
the public service are much more precarious. The same people who
applied years ago are much closer to retirement. They may now be
willing to pay.
If this describes you, phone the OPSEU Pension Trust
at 1-800-906-7738 for more information.
You can only buy back eligible service, i.e, time you worked when
you did not pay pension deductions. The price of the buyback will be
higher today than ten years ago because of interest charges. You may
need a copy of the original offer to purchase.
OPSEU ActionFax is an electronic publication of the Ontario Public
Service Employees Union. Original authorized for distribution by Leah
Casselman, president.
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