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New options for post-retirement benefits: an OPSEU
Q&A
Questions and answers about post-retirement benefits for
OPSEU members in the OPSEU Pension Trust
(OPTrust) pension plan
Background
On November 16, 2016, OPSEU announced that it had signed
an agreement with the Government of Ontario
that would give OPSEU members in the OPTrust
pension plan new choices with respect to their
benefits after retirement. This Q&A
answers some of the questions members may
have.
1.
Why was the union negotiating about my
post-retirement benefits in the first place?
On
February 18, 2014, the Ontario government
announced a plan to change the funding of
post-retirement benefits for members of the
OPTrust pension plan and the Public Service
Pension Plan. The government said that members
of both plans who retired after December 31,
2016 would have to pay 50 per cent of the cost
of the premiums for their benefits. This would
cost single plan members about $900 per year;
plan members with families would pay about
$1,600 per year.
The
government also announced that it would
require OPTrust members to work longer in
order to access post-retirement benefits (20
years instead of 10).
OPSEU's
response was that the government had no right
to unilaterally change members'
post-retirement benefits or the way they were
funded. Members filed hundreds of individual
grievances and the union filed a policy
grievance to try to stop the change from
happening.
2.
What does the new settlement give me that I
didn't have before?
The
main thing it gives you is choice. Members who
retire on or after January 1, 2017 can still
accept the government's original plan
("Plan A") and pay half the cost of
the premiums, BUT now you can also choose a
modified plan ("Plan B") at no cost
at all. Members who choose either option can
also upgrade their coverage at group rates.
There is also a limited ability for current
employees to move from Plan A to Plan B and
vice versa after retirement.
3.
Where can I see the details of what was agreed
to?
A
comparison chart showing the differences
between Plan A and Plan B is available online
at https://opseu.org/news/optrust-retiree-benefits-comparison.
The full Memorandum of Settlement between
OPSEU and the Government of Ontario is
available at https://opseu.org/news/optrust-retiree-benefits-memorandum-settlement.
4.
Aren't post-retirement benefits part of my
collective agreement?
Post-retirement
benefits for OPTrust members are provided
under what is known as an "order in
council" and have always been paid for
and managed directly by the government.
5.
Why didn't the union simply save "Plan
A" for everybody?
The
only way to have done this would have been to
gamble that the Grievance Settlement Board
(GSB) would rule against the government
following hearings that had been scheduled to
continue in the late spring of 2017. While the
union was confident that it had a case, there
was no guarantee that an arbitrator would rule
in our favour. The union's view was that a
negotiated settlement in 2016 would allow
OPSEU members to make retirement decisions on
certainties rather than guesses.
6.
Why did the union accept benefit reductions in
"Plan B"?
The
union's goal in these negotiations was to
provide an option that would continue to be
100 per cent government-paid, thereby saving
members' money while maintaining or expanding
the benefits members need and use the most.
7.
Why did it take so long to negotiate the
agreement?
The
union has been pushing the government to
withdraw or change its plan since 2014. It was
only when the GSB rejected the government's
preliminary objections to our grievances that
the government got serious about settling the
dispute.
8.
What happens to the grievances that were
filed?
Under
the Memorandum of Settlement, all grievances,
including individual grievances, are
withdrawn.
9.
The government says Plan B is "priced
at" 50 per cent of the value of Plan A.
How am I better off with Plan B?
The
government has to take political
considerations into account when describing
this deal. The reality is, the actual value of
Plan B will be different for every member
based on his or her own health care needs. But
one thing is true for all members: after
December 31, 2016, enrollment in Plan A will
cost more than $900 for individuals and more
than $1,600 for families, but Plan B comes at
no cost.
10.
Which benefit plan do I have if I retire before
January 1, 2017, and what do I pay for?
If
you retire and receive at least one pension
cheque before January 1, 2017, and have at
least 10 years of pension credit, your
post-retirement benefits will be delivered
under Plan A at no cost.
11.
What is the last day I can retire and still
receive a pension cheque in 2016?
You
should confirm this with your employer, as
different employers are on different pay
cycles and may take longer to process your
request. Needless to say, you need to apply
soon if you want to retire before the end of
the year and receive post-retirement benefits
under Plan A at no cost to yourself.
12.
Which benefit plan do I have if I retire after
January 1, 2017, and what do I pay for?
If
you retire on or after January 1, 2017, and
have at least 10 years of pension credit, you
choose between Plan A (and pay half the cost
of premiums) and Plan B (and pay no cost at
all).
13.
What happens to my post-retirement benefits if
I do not have 10 years worth of pension
credits by January 1, 2017?
If
you have less than ten years worth of pension
credits as of January 1, 2017, you are able to
choose between Plan A (and pay half the cost
of premiums) and Plan B (and pay no cost at
all) as long as you have at least 20 years of
pension credits when you retire and retire to
an unreduced pension.
14.
What happens to the post-retirement benefits
of people who are hired on or after January 1,
2017?
New
employees hired on or after January 1, 2017
are eligible to receive post-retirement
benefits under Plan B and are required to pay
100 per cent of those premium costs (which is
50 per cent of the cost of Plan A). Employees
will require 20 years of pension credit and
retire to an unreduced pension, which means
the changes would not take effect until
January 1, 2037 at the earliest.
15.
I have already given notice to my employer
that I will retire prior to January 1, 2017 in
order to preserve my post-retirement benefits
under Plan A. Can I undo that?
Yes.
If you choose to continue working, please
inform your employer that you are withdrawing
your notice of retirement. When you do retire,
and you meet the eligibility requirements, you
will then be able to choose between Plan A
(and pay half the cost of the premiums) and
Plan B (at no cost to you).
16.
I retired after February 18, 2014. How does
the settlement relate to me?
If
you retired after February 18, 2014, you are
now eligible to apply for restricted
competitions with your old employer as if you
were still an active employee, with your
seniority based on the date of your
retirement.
17.
Where can I get more information?
If
you have a question not covered here or in the
other materials listed above, please send an
email to the OPSEU Pension and Benefits Unit
at PensionsandBenefits@opseu.org.
Authorized
for distribution by Warren (Smokey) Thomas,
President.
Ontario
Public Service Employees Union
100
Lesmill Road, Toronto, Ontario M3B 3P8
www.opseu.org
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