Retirement

Receiving your pension

Are you a retired member? Find everything you need to know about OMERS pensions, taxes and inflation protection below.

Pension payment datesPension payments and bankingTax and your OMERS pensionInflation protectionTurning 65

OMERS pension payments

Pension payments by direct deposit arrive on the first banking day of the month. Most major Canadian banks will have the payment in your account the same day; credit unions and non-traditional banks may take an extra day or two. Pension cheques are mailed to arrive at the beginning of the month.

Pension payment dates for 2024

January 2

July 2

February 1

August 1

March 1

September 3

April 2

October 1

May 1

November 1

June 3

December 2

Pension payments and banking

We pay OMERS pensions in equal monthly instalments at the beginning of the month. Most OMERS pension payments are made by direct deposit. Payments are also made by cheque.

Direct deposit (available in Canada, the U.S. and the U.K.)

Pension payments by direct deposit are automatically deposited into your account on the first banking day of the month. (Note: this isn't always the first day of the month; it could be the first day banks are open after a weekend or holiday.)

  • Direct deposit is safe and secure: you don't have to wait for a cheque to arrive by mail, and you don't have to be home to get your payment.

  • You can easily change your address information online with myOMERS or by calling OMERS.

We can make direct deposit payments to most banks and financial institutions in Canada, the U.S. and the U.K. If you receive your pension in Canadian dollars, your 12 monthly pension payments in any year will be the same. Pensions paid in U.S. dollars or U.K pounds may fluctuate, depending on your bank's exchange rate.  If your payment is not in your account by the first banking day of the month, contact your bank or OMERS Member Experience.

Setting up direct deposit pension payments

To have your pension directly deposited into your bank account every month:

  • Submit a Changing information (retired member or survivor) form and complete the banking information section, or include a cheque marked “void” with the form.

  • For a bank account in the U.S. submit a USA direct deposit request form.

  • For a bank account in the U.K. submit a  U.K. direct deposit request form.

Notify OMERS immediately of bank changes

For your protection, OMERS cannot make changes to your banking information by email.

  • If you are a registered myOMERS user, you can change your banking information online.

  • Submit a Changing information (retired member or survivor) form.

  • Send a signed letter to OMERS that includes your full name (printed); your OMERS membership number (or social insurance number); the effective date of the change; the new information (bank, branch, and account number), or a void cheque from the new account.

Tip: Keep your old account open until the deposit actually goes into your new account, in case we don't receive your new information in time for your next monthly payment.

Payments by cheque

  • If you receive your monthly pension payments by cheque, you can expect to receive your cheque at the beginning of each month.

  • If your cheque hasn't arrived within five business days, please contact OMERS Member Experience. If you live outside Ontario, in the U.S., or overseas, please allow 10 days.

  • To change your address or other information:

    • Submit a Changing information (retired member or survivor) form; or

    • Send a signed letter to OMERS that includes your full name (printed), current address and phone number; your OMERS membership number or reference number (or social insurance number); the effective date of the change; and the new address information.

Tax and your OMERS pension

Information about income tax and your OMERS pension is valuable.

Be sure to make use of all available tax credits and deductions to help maximize your money. For example:

  • Once you turn 65, you may be eligible for the federal age tax credit.

  • As a retiree, you may qualify for HST credits.

  • When you withdraw income from a RRIF or other plan, keep in mind that this income could impact your eligibility for government programs such as age credits, HST credits, the Guaranteed Income Supplement (GIS) and more. Always check first.

The tax withheld from your OMERS pension is based on your monthly pension payments, your federal and provincial income tax forms (TD1) or country of residence information, and any additional tax you've asked us to withhold.

To update your federal and provincial income tax information, complete and send OMERS the TD1 forms.

Income tax slips (T4A or NR4)

You can view and print your tax slip directly from your myOMERS account, and OMERS will also send you a tax slip for your OMERS pension (retirement, survivor or disability pension), by the end of February each year. The tax slip is your official proof of income for tax purposes. It shows the total amount of pension paid to you during the previous calendar year and the total tax deducted.

Tax slips are mailed to your principal (home) address.

  • T4A: If you reside in Canada, we will mail a T4A slip to your home address.

  • NR4: If you reside outside Canada, we will mail an NR4 slip to your home address.

If you haven't received your tax slip by early March, contact OMERS Member Experience; we will confirm your mailing address and send you another slip.

  • As a registered myOMERS user, you can reprint your T4A tax slips online.

  • If part of your pension is paid from the Retirement Compensation Arrangement (RCA), we will send you separate tax slips for the portion paid from the OMERS Primary Plan and for the portion paid from the RCA.

Tax slips for payments to a former spouse

  • If OMERS pays a portion of your pension directly to your former spouse, we will send the former spouse a tax slip for the amount paid. That amount will not appear on your tax slip, as it's a reduction in your OMERS pension income.

  • If you have arranged to pay your former spouse yourself (without OMERS involvement), your full OMERS pension income will appear on your tax slip.

Additional income tax deductions

Income tax is deducted from your OMERS pension as required by the CRA. You can also arrange to have OMERS deduct additional tax from your monthly payments. For example, if your total income puts you into a higher tax bracket, increasing the tax at source may help you avoid a big bill at tax time. We recommend discussing your overall tax situation with a tax adviser or the CRA.

To request or to change the additional amount of tax withheld from your monthly pension payments, there are several ways to do so:

  • Change your tax online by logging into myOMERS.

  • Sign and submit a Changing Information (retired member or survivor) form to OMERS.

  • Send OMERS a signed letter, with your full name (printed), OMERS reference number (or social insurance number), and the total additional monthly amount you want withheld.

If you receive more than one OMERS pension (e.g., from OMERS Primary Plan and from the RCA) you will need to submit a separate additional tax request for each pension.

Basic personal amount

The basic personal amount is the income threshold at which CRA begins to deduct taxes. This amount is indexed to inflation, based on the Canadian Consumer Price Index (CPI) as reported by Statistics Canada. An increase in the basic personal amount means a greater portion of your pension income is not taxed. Visit the Canada Revenue Agency (CRA) website for the current basic personal amount.

Tax and retro payments

A retro-payment is likely be taxed at a higher rate than monthly pension payments. The tax on monthly payments is calculated on an annualized basis using a blended tax rate. Each portion of the monthly pension payment is placed into the applicable tax bracket, as set out by the CRA.

Have a look at these sample tax rates:

Tax and retro payments: Sample tax rates

10% for annual income up to $30,000

20% for annual income from $30,000 to $60,000

30% for annual income over $60,000

For a $3,000 monthly pension payment ($36,000 annually), a portion is taxed at 10% and a portion is taxed at 20%. A retro-payment of $3,500 would be taxed at 20% because it falls in the $30,000 to $60,000 income range.

When you file your tax return, your total OMERS income, including the retro-payment, is factored in with the tax paid for the year. If your tax paid is in excess of what is required on your income from all sources (e.g., CPP, OAS, RRIFs, etc.), you would get a refund from CRA.

Inflation protection

Inflation protection increases OMERS retirement, disability and survivor pensions each year, based on the increase in the Consumer Price Index (CPI), as follows:

  • Benefits earned on or before December 31, 2022 receive full inflation protection, up to a maximum increase of 6%. Any excess is carried forward to later years when the CPI increase is less than 6%, provided the pension is still in pay.

  • Benefits earned on or after January 1, 2023 are subject to Shared Risk Indexing (SRI), meaning that the level of inflation protection will depend on the OMERS Sponsors Corporation (SC) Board’s annual assessment of the financial health of the OMERS Plan.

The increase as of January 1, 2024 is 4.42%.

In December, we send retired members and survivors a personalized Annual Statement of Pension showing the details of their January pension increase. The statements are posted on myOMERS, then mailed to members who receive their pension information by paper mail.

Get your Annual Statement of Pension early!

Activate your  myOMERS account to get your statement as soon as it is available online at myOMERS.com.

How inflation protection works

For pensions that are in pay based on benefits earned prior to January 1, 2023, each January, the eligible pension increases by 100% of the increase in the Canadian CPI, up to a maximum increase of 6%. If the CPI increase is greater than 6%, pensions eligible for an inflation adjustment will increase by this 6% maximum but the excess (i.e., the applicable CPI increase above 6%) is carried forward for application in a future year when the CPI increase is less than 6%, provided the pension is still in pay.

CPI measures approximate changes in the cost of living based on the price of a basket of goods and services that an average Canadian household buys. The basket includes food, housing, transportation, energy, furniture, clothing and recreation. More information about the CPI is available on  Statistics Canada's website.

Pensions in respect of benefits earned on or after January 1, 2023 are subject to Shared Risk Indexing (see above).

How OMERS calculates the annual inflation increase

In respect of benefits earned prior to January 1, 2023, OMERS uses the average of the CPI for the 12-month period ending in October and compares it to the average for the same period the previous year. The percentage increase determines the inflation adjustment increase for eligible OMERS pensions, up to a maximum increase of 6%.

OMERS method of calculating the annual inflation increase (i.e., the CPI increase) is consistent with the method used by the Canada Pension Plan (CPP), except OMERS rounds the results to two decimal places while CPP rounds to one decimal place. For benefits earned prior to January 1, 2023, the applicable CPI increase will equal the OMERS inflation adjustment in most years except in the case where the CPI exceeds 6%.

In respect of benefits earned on or after January 1, 2023, increases are subject to Shared Risk Indexing, meaning that the level of inflation protection will depend on the OMERS Sponsors Corporation (SC) Board’s annual assessment of the financial health of the OMERS Plan.

How your first increase is pro-rated

Your first increase may be pro-rated based on the month your pension started. For example, the increase as of January 1, 2024 is 4.42%. If your pension started in February 2023, your 2024 increase would be 3.68% (which is 0.8333 of 4.42%), following the decision that the annual inflation adjustment to pensions in pay will not be impacted by SRI in 2024 and 2025. In January 2025, your pension will receive the full applicable 2025 increase provided the pension is still in pay.

The proration of your pension must be calculated in accordance with the OMERS Plan text, which sets out the proration factors. The table below shows the proration factors for each month. These factors represent the number of months remaining in the year after your first pension payment and determines the applicable increase to your pension on the following January 1. For example, if your pension started in February 2023, the 0.8333 proration effective on January 1, 2024 reflects the 10 months in 2023 that your pension was being paid (i.e., 10 months ÷ 12 months) after your first payment.

Who receives the 0.51% excess inflation adjustment on January 1, 2024?

Any member whose pension received an inflation adjustment effective January 1, 2023 and whose pension is still in pay on January 1, 2024 will receive the 0.51% excess inflation adjustment in addition to the 4.42% inflation adjustment effective January 1, 2024 for a total inflation adjustment of 4.93%.

Who was affected by the 6% maximum on January 1, 2023?

The 6% maximum inflation adjustment provided on January 1, 2023 affected Plan members who were in receipt of a pension and eligible for inflation adjustments. Specifically, all members and survivors of members with pensions in pay on January 1, 2023 were affected if they started their pensions prior to December 1, 2022.

In addition, the 6% maximum affected some deferred vested members who were eligible for pre-retirement indexing, which is the inflation protection OMERS applies to a member’s deferred benefit between the date a member stops working for an OMERS employer and the date their pension begins. Pre-retirement indexing is applicable for members who terminate employment with their OMERS employer after their early retirement birthday [55th birthday for normal retirement age (NRA) 65 or 50th birthday for NRA 60]. Otherwise, pre-retirement indexing for a deferred vested pension is only applicable in respect of benefits based on pre-2013 credited service, if any.

Is the 6% maximum on inflation adjustments a new provision?

No, the 6% maximum inflation adjustment has been in the OMERS Plan text since the early 1990s. However, prior to January 1, 2023, the inflation adjustments have not exceeded 6%.

For a pension that began in…

Pro-rating (first increase only)

January 2023

0.9167

February 2023

0.8333

March 2023

0.7500

April 2023

0.6667

May 2023

0.5833

June 2023

0.5000

July 2023

0.4167

August 2023

0.3333

September 2023

0.2500

October 2023

0.1667

November 2023

0.0833

December 2023

0.0000

How is the excess inflation adjustment carried forward?

In respect of benefits earned prior to January 1, 2023, OMERS determines the CPI increase as the average of the CPI for the 12-month period ending in October over the average for the same period the previous year. If the CPI increase is greater than 6%, the inflation adjustment is 6% and the excess of the CPI increase above 6% is carried forward for application in a future year when the CPI increase is less than 6%, provided the pension is still in pay. Generally, the excess would be added to the following year’s inflation adjustment if it is possible to do so.

If a member passes away prior to the year that the excess amount is added to the inflation adjustment and no further benefits are payable at the member’s death, no further indexing will be applicable. If a pension is payable to the member’s surviving spouse and/or dependent children, the calculation of their pension amounts will continue to be eligible for inflation adjustments (including the excess inflation adjustment, if applicable).

Here’s an example: The January 1, 2023 inflation adjustment exceeded the 6% maximum by 0.51%. Using the inflation adjustment effective January 1, 2024 (applies to all benefits, as a result of the decision that the annual inflation adjustment to pensions in pay will not be impacted by SRI in 2024 or in 2025) of 4.42%, the impact on a $100 annual pension of a retired member or deferred vested member who is eligible for pre-retirement indexation will be different depending on the member’s circumstances. Consider the following three scenarios:

  • Scenario 1: The member’s retirement or termination of employment occurred prior to 2022,

  • Scenario 2: The member’s retirement or termination of employment occurred on June 1, 2022

  • Scenario 3: The member’s retirement or termination of employment occurred on June 1, 2023

Scenario

On January 1, 2023

On January 1, 2024

(1) Retired / Terminated Prior to 2022. Pension in 2022 is $100.00.

Inflation adjustment = 6%

$100.00 pension increases to $106.00 for 2023

Inflation adjustment = 4.42% + 0.51%

$106.00 pension increases to $111.23 for 2024

(2) Retired / Terminated June 1, 2022. Pension in 2022 is $100.00

Inflation adjustment pro-rated = 3% (6% x 0.5000)

$100.00 pension increases to $103.00 for 2023

Inflation adjustment = 4.42% + 0.51%

$103.00 pension increases to $108.08 for 2024

(3) Retired / Terminated June 1, 2023. Pension in 2023 is $100.00

N/A

Inflation adjustment pro-rated = 2.21% (4.42% x 0.5000)

$100.00 pension increases to $102.21 for 2024

Here’s how pro-ration works: In Scenario 2, on January 1, 2023, the member received a pro-rated inflation adjustment (i.e., the 6% inflation adjustment was pro-rated to 3% because the pension was in pay, or became deferred, for half of 2022). In the example, the member in Scenario 2 would be eligible to receive the excess adjustment of 0.51% without pro-ration as part of the January 1, 2024 inflation adjustment, provided the member’s pension benefit is still payable. Contrast this to Scenario 3 where the member was an active member on January 1, 2023 and was not eligible for an inflation adjustment while still accruing benefits. In this case, the member receives their first inflation adjustment on January 1, 2024 based on the applicable CPI increase of 4.42% on a pro-rated basis.

Pension income splitting

This Income Tax Act provision allows retired couples to reduce their overall taxes.

A retiree can allocate up to half of their pension income to their lower-income spouse or partner when filing a tax return. This feature is designed to drop the higher-income spouse or partner into a lower tax bracket.

Information and application forms are at the Canada Revenue Agency (CRA) website.

OMERS and income splitting

Your OMERS Plan pension is eligible for pension income splitting.

Retirement compensation arrangement (RCA) benefits – The RCA benefit is eligible for income splitting after age 65 (subject to limits). Before age 65, the RCA benefit is not eligible for income splitting. The RCA is a separate fund that pays benefits over and above the maximum pension that the OMERS Plan is permitted to pay according to the Income Tax Act.

Setting up pension income splitting

Pension income splitting is set up through Canada Revenue Agency (CRA), not through OMERS.

The retired member and the spouse or partner must complete a Form T1032, Joint Election to Split Pension Income.

There is a line on the income tax return for the retired member to deduct the pension amount allocated to their spouse, and one for the spouse to report the allocated pension amount.

Turning 65

Age 65 is a milestone for OMERS retired members. For instance:

  • age 65 is a good time to think about medical insurance

  • the amount of your OMERS pension changes

  • some important federal benefits become available to you.

Medical insurance

Age 65 is often a turning point for medical benefits:

  • employer medical and dental coverage may end at 65;

  • Ontario residents become entitled to benefits under the Ontario Drug Benefit Program when they turn 65, but some products may not be covered, e.g., eyeglasses or prescription drugs bought outside Ontario; and

  • it may have been several years since you assessed your medical insurance needs.

While we cannot endorse or guarantee any of these products or services from the organizations below, we have agreed to pass along their information to help with insurance planning.

Be sure to identify yourself as an OMERS member if you enquire about coverage for any of these special offers.

Organization

Contact information

RTOERO

Health, dental, travel, home, auto and life insurance for retired education employees

RTOERO

Tel: 416-962-9463

Toll free: 1-800-361-9888

E-mail: info@rtoero.ca

Mitchell & Abbott Group Insurance Brokers

Property and automobile insurance

Mitchell & Abbott Group Insurance Brokers

P.O. Box 6040, Station ‘D'

Hamilton, Ontario L8V 5C4

Tel: 1-800-463-5208

E-mail: tgraves@mitchellabbottgrp.com

Victor/MROO

Health, dental, travel, life insurance, and RecoverEase insurance plans for retirees

Victor Insurance Managers Inc.

600 - 55 Standish Court

Mississauga, Ontario L5R 4B2

Tel: 1-800-363-7861

e-mail: mroo.ca@victorinsurance.com

PlanDirect Insurance

Health and Dental Insurance

Individual Health Services

Great-West Life

200 - 211 Consumers Road

Toronto, Ontario M2J 4G8

Tel: 1-800-565-4066 or 416-490-0072

e-mail: plandirect@gwl.ca

Organization

Contact information

OTIP

Health, dental, travel, home, auto and life insurance for retired education employees.

OTIP

125 Northfield Drive West

P.O. Box 218

Waterloo, Ontario N2J 3Z9

Tel: 1-800-267-6847 or 519-888-9683

Police Pensioners Association of Ontario (PPAO) Sun Life Benefit Plan

Health, dental and travel insurance for police retirees and family members

Sun Life Benefit Plan

Mike Kelly CFP CHS

1202 Lambton Mall Rd

Sarnia, Ontario N7S 5R6

Tel: 519-542-7779 ext. 2213 or 1-866-282-3924 ext. 2213

Fax: 519-542-2560

E-mail: mike.f.kelly@sunlife.com

Medallion Group Insurance for First Responders

Medallion Group Insurance for First Responders

604 Belmont Ave W Kitchener, ON N2M 1N5

Tel: 1-800-339-9935

Fax: 1-888-416-6911

E-mail: medallioninfo@mcfr.ca

Special Benefits Insurance Services

Individual health, dental and travel insurance specialists for retirees looking to continue their coverage.

Special Benefits Insurance Services

366 Bay Street, 7th Floor

Toronto, Ontario M5H 4B2

Tel: 1-800-667-0429

E-mail: general@sbis.ca

OMERS bridge benefit

While your lifetime pension is paid for life, the month after you turn 65 OMERS bridge benefit ends and will be taken off your pension payment. Just before you turn 65, you will receive a notice from OMERS detailing the change to your pension.

Background

Your OMERS pension is designed to work with the Canada Pension Plan (CPP) to help provide a reasonable, total retirement income. Here's how:

  • While you work, you pay a lower OMERS contribution rate on the portion of your earnings for which you also contribute to CPP (up to $68,500 in 2024).

  • When you retire, your OMERS and CPP pensions work together to provide you with retirement income.

How we calculate your bridge benefit

0.675% x credited service (years) x lesser of "best five" earnings or $64,060

$64,060 is the current five-year average (2020-2024) of CPP earnings limit.

No link between CPP pension and OMERS bridge benefit

Your CPP pension is based on how long you have worked and contributed to CPP. The OMERS bridge benefit is based on your credited service in OMERS. The two amounts are not linked and may be quite different.

Canada Pension Plan (CPP) and other government benefits

If you haven't already started to receive your CPP pension, be sure take the steps necessary to ensure you receive the benefit you've earned. Your CPP benefit is not sent automatically; you must apply for it. 

Application kits are available from Human Resources and Skills Development Canada either online or from the local office in your area.

Other government benefits include the Old Age Security (OAS) program, which is supplemented by the Guaranteed Income Supplement and the Allowance for low-income seniors. When you turn 65, you may be entitled to these benefits. Like CPP, you must apply for them.

MROO (Municipal Retiree Organization Ontario) zone meetings

Each spring, the Municipal Retirees Organization Ontario (MROO) hosts Zone Meetings across the province.

  • MROO's president provides an update on MROO's advocacy on behalf of pensioners.

  • OMERS staff share information about the pension plan and are available to answer questions.

  • Guest speakers address a variety of topics of interest to retirees.

  • All OMERS retirees are invited.

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