Your OMERS lifetime pension is based on your years of credited service in the OMERS Plan and your best five consecutive years of contributory earnings, and is paid to you after you retire for as long as you live.
An OMERS pension earned above the maximum set by the Income Tax Act is paid through the OMERS Retirement Compensation Arrangement (RCA), which is a special fund for this purpose.
Credited service is the amount of time you have worked with an OMERS employer and contributed to the Plan, and includes any service you purchased or transferred in from another pension plan.
OMERS uses your credited service to determine the pension benefit you will receive. The more years of credited service you have in the Plan, the larger your pension benefit will be.
Your "best five" earnings is the average of your highest-earning 60 consecutive months. It does not include any overtime pay and also excludes most lump-sum payments. If you have less than five years of credited service, OMERS uses your actual credited service to calculate your average earnings.
AYMPE is the average of the year’s maximum pensionable earnings (YMPE) for the five-year period determined at the time of a benefit calculation. At the time of calculating your lifetime pension, the lesser of “best five” earnings or AYMPE is considered.
Your lifetime pension amount may vary based on when you decide to start receiving your pension. For instance, if you’ve stopped working for your OMERS employer, you can choose to start receiving an early retirement pension on or after your early retirement birthday (55th birthday if you have a normal retirement age of 65 or 50th birthday if you have a normal retirement age of 60).
There are two types of early retirement pensions: unreduced and reduced.
An unreduced pension is calculated without a reduction. You qualify for an unreduced pension if you have:
Reached normal retirement age (NRA)
30 years or more of eligible plus credited service* or
Your age + your eligible service plus credited service = 90 (for NRA 65) or 85 (for NRA 60)*, also known as the “90 Factor” and “85 Factor” respectively
*While pensions that start at normal retirement age will be unreduced, only those who are not affected by the 2013 benefit changes are eligible to qualify under the 30 years of service or 85/90 Factors.
If you don’t qualify for an unreduced pension, you can still retire within 10 years of your NRA (55th birthday for NRA 65 or 50th birthday for NRA 60) but your pension will be reduced. If you aren’t affected by the 2013 benefit changes, based on your NRA, your OMERS pension is reduced by 5% per year multiplied by the least of:
65 minus your age when you retire
90 Factor minus your retirement age-plus-service** factor or
30 years minus your years of service**
**Eligible service + credited service
60 minus your age when you retire
85 Factor minus your retirement age-plus-service** factor or
30 years minus your years of service**
**Eligible service + credited service
If your pension starts before age 65, you may be entitled to the OMERS bridge benefit. This temporary benefit helps “bridge” your OMERS pension until age 65, when your Canada Pension Plan (CPP) is expected to begin. Your CPP pension is based on how long you have worked and contributed to CPP. The OMERS bridge benefit is based on a formula under OMERS Plan terms. The two amounts are not linked and will be quite different.
Benefit calculation changes that took effect on January 1, 2013 affect your eligibility for the OMERS bridge benefit if your employment ends and you are not yet eligible for an early retirement pension. If you have not reached your early retirement birthday (55th birthday for NRA 65 or 50th birthday for NRA 60), your benefit will be calculated in two parts:
Pre-2013 credited service includes the OMERS bridge benefit.
Post-2012 credited service varies:
If your NRA is 65, the OMERS bridge benefit will not be included in the post-2012 portion.
If your NRA is 60, a five-year portion of the bridge benefit (from age 60 to 65) will be included in the post-2012 portion.
If you have reached your early retirement birthday when your employment ends, you are entitled to a bridge benefit on all your service.
Learn how inflation protection helps your OMERS pension.
Learn how 2013 benefit changes may impact your pension.
Learn how to start preparing for this next chapter in life.