A year after the OPSEU Pension Trust launched a new plan for nonprofit organizations, it has enrolled its first members.
The OPTrust Select was launched with the goal of providing a defined benefit plan for those in Ontario’s broader public sector, charitable and nonprofit groups that don’t have their own DB plans.
Seven organizations are joining, bringing along with them 215 members, including the Ontario Nonprofit Network, Barry’s Bay and Area Senior Citizens Home Support Services, Community Food Centres Canada, Contact Brant, LiveWorkPlay, Newcomer Centre of Peel and People for Education.
Since announcing the launch, the OPTrust has been working behind the scenes to ensure enacting documents were finalized, systems were ready and all regulatory requirements were met for implementing the new plan, says Dani Goraichy, the pension fund’s vice-president of actuarial services and plan policy.
Employers interested in the plan also went through an application process, submitting key information to the OPTrust such as audited financial statements and membership data. “We have to review that,” says Goraichy. “We do an actuarial assessment of it and then we do a review of their financial statements to make sure that they have sources of funding, that they’ve been in existence for a significant amount of time and we need to also make sure that the level of turnover, as well as a whole bunch of other things, are acceptable for the plan itself, that they will actually get a benefit out of the plan.”
In addition to the seven employers that have joined, 70 other organizations from across Ontario have applied.
The OPTrust Select won’t be managed as a segregated fund, so the new members will be able to take advantage of the pension fund’s investments and governance structure.
New plan members will contribute three per cent to the OPTrust Select, which will be matched by the employer. This compares to the OPTrust’s core plan members, who contribute on average about 9.9 per cent each for employer and employee.
The OPTrust Select has about a third of the contributions in primary scheduled benefits and about just under half of the lifetime pension, says Goraichy, noting the plan doesn’t include some of the ancillary benefits that are present in the primary schedule of benefits.
Members joining the OPTrust Select will have the ability to buy back service for the period of employment with the current employer using funds from a registered retirement savings, a locked-in retirement account, their employer’s closed defined contribution plan, cash or a combination of these options. Buying back service can also be amortized over up to 10 years for cash payments made through online banking or payroll deduction.
“And everybody has the right to do this, but not the obligation,” says Goraichy.
This article was originally published on Benefits Canada‘s companion site, the Canadian Investment Review.