Plan design changes are on the horizon for the Ontario Municipal Employees Retirement System’s primary pension plan.
The OMERS Sponsors Corp. board has approved five plan changes. The first three changes are effective immediately and are tied to circumstances related to the coronavirus. The other two are part of the annual plan review, which were announced in April, and will take effect Jan. 1, 2023.
“The OMERS Sponsors Corp. board of directors is made up of representatives of sponsor organizations,” said Michael Rolland, chief executive officer of the OMERS Sponsors Corp., in a press release. “The SC board is charged with the annual responsibility of reviewing plan design and making changes to ensure the plan remains sustainable, affordable and meaningful for the OMERS community long into the future.”
Normally, when plan members return from leave periods, they may be able to purchase the period to add to their OMERS credited service. The OMERS is now extending its leave purchase deadlines by one year for members who return from a leave of absence in 2020 or 2021.
It’s also reducing or eliminating the 36-month employment requirement for purchases of periods of reduced pay, subject to changes to income tax regulations. And the pension fund will be permitting temporary layoffs as purchasable service, allowing members to buy credited service for periods of absence resulting from temporary layoffs initiated in 2020 or 2021. Service can be purchased by members only at double contributions.
Stemming from the annual plan review, the board approved shared-risk indexing, providing the plan with the option to reduce future inflation increases on benefits earned after Dec. 31, 2022 based on an annual assessment of its health and viability. The change won’t impact benefits earned before Jan. 1, 2023 and will only impact plan members retiring after Dec. 31, 2022.
Further, the board is removing eligibility rules so employees who aren’t full time can join the plan at any time.
“The changes announced today, including ones that will support our members who have been impacted by the COVID pandemic, are important to fulfilling that responsibility,” said Rolland. “On behalf of the SC board, I would like to thank the sponsoring organizations, stakeholders, employers and members who provided important input in this review process.”