Pension FAQ
I understand my pension plan contributions are protected while I am on LTD. Who makes these payments?
Pension contributions are made on your behalf by the Ontario Teachers' Pension Plan (OTPP). This allows you to continue to accumulate years of pensionable service even though you are on LTD. For the Ontario Municipal Employees Retirement System (OMERS), pension contributions can potentially be waived after filing a claim with OMERS for consideration of this benefit.
I am receiving LTD benefits and will soon reach the 85 factor. Am I required to apply for my service pension at that time?
No, you do not need to apply for a service pension when you reach the 85 factor. If however, you have accumulated 33 years of credited service, reached your 85 factor and your LTD plan has a maximum benefit period ending on the date you become eligible for a 66% unreduced pension, it would be wise to apply for your pension because your LTD benefit terminates at this point.
What is the difference between the 85 factor and the 66% unreduced service pension?
The 85 factor is a combination of years of credited service plus age, providing a pension based on the years of service, which may be less than 66%. The 66% unreduced service pension is based on the qualifying factor and years of credited service (at least 33 years). A member on LTD may be eligible to retire, but under standard OTIP LTD plans, their benefits will not actually terminate until they reach the 66% unreduced service pension date or the end of the month in which they turn 65, whichever comes first.
I have applied for my service pension from the Ontario Teachers Pension Plan (OTPP). How will this affect my LTD benefits?
In accordance with the Pension Act, your LTD benefits will terminate upon your retirement.
OTIP has advised me that I no longer qualify for LTD even though my medical condition prevents me from returning to work. Is it possible to continue
to make contributions to my pension plan when my accumulated sick leave credits are exhausted and my LTD benefits have terminated?
If you plan to challenge the termination of your LTD benefits, it would be advisable to wait until the appeal is resolved. The OTPP will make the contributions on your behalf if your appeal is successful. On the other hand, if you accept the insurer's decision regarding your LTD or your appeal is denied, you should contact the OTPP to verify your options. You may find, for example, that you are able to continue to make pension plan contributions while on a board-approved leave of absence.
OMERS provides for the waiver of pension contributions. Your OMERS waiver of pension contributions claim is assessed separately from the LTD claim.
I understand that the OTPP implemented benefit improvements as of September 1, 2001. How does this impact my LTD claim for benefits?
Two OTPP amendments that have a direct impact on a member's LTD claim are:
- If your LTD benefits started prior to September 1, 2001, you will no longer have to top-up your contributions to keep up with inflation since the OTPP will automatically adjust your salary for inflation each year.
- If you are disabled and your LTD benefit payments commence on or after September 1, 2001, your pension contributions will be waived by the OTPP; otherwise, the pension benefit provision of your LTD contract applies
If you don't see the answer to your question, please contact us.