Every member of the Plan is automatically a member of the RCA, which was created when new tax rules came into effect in 1991. Each year the applicable limit grows and only a small fraction of members will ever contribute to or receive a benefit from the RCA.
Members make contributions to the Plan and RCA on their contributory earnings up to a cap. This cap is the lower of 150% of a member's base salary in the year or seven times the year's maximum pensionable earnings (YMPE) in the year ($499,100 in 2025). These capped contributory earnings may also form part of a member’s "best five" earnings. A member may have contributed on uncapped contributory earnings prior to 2016 if they were eligible. In that case, the uncapped earnings may still factor into the member’s "best five" earnings.
Both you and your employer make contributions to OMERS on contributory earnings, up to the RCA earnings cap discussed above.
RCA benefits only apply to post-1991 credited service. This generally includes periods when members contributed to the Plan and the RCA through payroll deduction and certain purchased leaves of absence (e.g., parental leaves).
Benefits payable in respect of purchased past service (i.e., through a buy-back) are only payable from the Plan and are subject to the applicable Income Tax Act maximums. If you are transferring service from another registered pension plan, it can only be transferred to the Plan and not to the RCA. Similarly, transfers from another RCA are not accepted.
The payment of RCA benefits is tied to how you receive your Plan benefit. If you leave your OMERS employer and choose to transfer your benefit out of the Plan, any RCA benefit would be paid out at the time of transfer but would be taxable in the year it is paid. Since payments from the Plan and the RCA are made separately, any tax withholding applicable to each is determined separately.
On the other hand, if you leave your OMERS employer and choose to defer your Plan benefit, the RCA benefit would also be deferred. Once you start collecting your pension from the Plan, you must also start collecting your pension from the RCA. In this case, you will receive separate payments from the Plan and the RCA, and both are subject to tax withholding at source and will be taxable in the year they are paid.
The features attached to the Plan, such as indexing and survivor benefits, are generally the same for the RCA.
If you are going through a separation or divorce, RCA benefits cannot be split at source by OMERS the way that the Plan benefits are. See Separation and divorce for more information.
Your contributions to the RCA are tax-deductible in the same way as Plan contributions and reflected on your T4 slip.
The ITA has different pension-splitting rules for retirement compensation arrangements (such as the RCA) than for registered pension plans (such as the Plan). To split RCA income, the member has to be at least 65 years old and the splitting is subject to maximums. Please see the Canada Revenue Agency’s form T1032 for more information or seek independent tax advice.
Learn more about the benefits of your OMERS pension.
Explore more OMERS benefits and plan for your loved ones.
Understand how a separation or divorce could affect your pension.