Employer, employee rates to increase by an average of 1 per cent each
The Ontario Municipal Employees Retirement System (OMERS) will increase its contribution rate for 2012 in an effort to return the plan to full funding.
For plan members whose normal retirement age is 65, the contribution rate for earnings up to the Canada Pension Plan (CPP) earnings limit for 2012 is 8.3 per cent, up from 7.4 per cent in 2011. For earnings over the CPP limit, the rate is 12.8 per cent, compared to 10 per cent in 2011.
For plan members whose normal retirement age is 60, the contribution rate for earnings up to the CPP limit is 9.4 per cent, up from 8.9 per cent in 2011. For earnings over the CPP limit, the rate will decline from 14.1 per cent in 2011, to 13.9 per cent in 2012.
In 2010, OMERS announced a three-year contribution rate increase for the OMERS plan, totalling 2.9 per cent per side (members and employers).
• A flat one-per-cent contribution rate increase per side was implemented in 2011.
• Rate increases for 2012 were allocated following a review of a contribution rate study and other information provided by OMERS actuary. Rates have been set and affect members differently at various earnings levels and normal retirement age groups (65 and 60). Some groups will be paying more or less than the one per cent average for 2012. These rates will provide the plan with the total contributions required in accordance with the OMERS Sponsors Corporation (SC) decision.
• The SC will set contribution rates for 2013, following a comprehensive review. These rates will average 0.9 per cent per side.
Contributions to the OMERS plan are made by members and matched by employers. Along with investment earnings, contributions provide members with lifetime retirement income. Contribution rate changes are effective with the first full pay in 2012.
