Long-term income protection (LTIP) rules for OPP and PEGO

LTIP rules for OPP and members represented by PEGO

On October 24, 2024, the PSPP was amended to change the contribution rules for OPP employees and those represented by PEGO who qualify for Long-Term Income Protection (LTIP). The change means that while such a member qualifies for LTIP, the employer will make both member and employer contributions. This will be the case even after the member reaches their early unreduced retirement date and without regard for the member’s years of pension credit.

The following applies to you if both are true:

You are one of the following:
- Represented by Professional Engineers, Government of Ontario (PEGO)
- An OPP employee represented by the Ontario Provincial Police Association (OPPA)
- An OPP commissioned officer represented by the Commissioned Officers' Association (COA)
- An OPP commissioner or deputy commissioner
You have been approved for LTIP

How do pension contributions work while I'm on LTIP?

Up until the date you accrue 30 years of pension credit and have reached your earliest unreduced retirement date (EURD), your employer will make both member and employer matching pension contributions to the PSPP.

When you have accrued 30 years of pension credit and have reached your EURD, you will be required to begin making your member contributions to the PSPP. Your employer will make matching pension contributions.

Every January, your salary will be adjusted for inflation and your contributions will be recalculated.

How much pension credit will I earn while I'm on LTIP?

While you are on LTIP and you and/or your employer are making your pension contributions as discussed above, you will continue to earn pension credit at the same level you did before the disability occurred. For example: If you worked full-time before you were on LTIP, you will continue to earn full pension credit during your LTIP period. If you worked 60% of full time before you were on LTIP, you will continue to earn 60% of full-time pension credit during your LTIP period.

If you elect not to make your pension contributions when you reach 30 years of pension credit and your EURD, you will stop accruing PSPP pension credit.

How long can I be on LTIP and earn pension credit in the PSPP?

Provided you continue to qualify for LTIP, you remain employed by your employer, and you and/or your employer are making your pension contributions as discussed above, you can earn pension credit in the PSPP until you reach age 65. At that time, you will be required to start your PSPP pension. If you elect not to make your pension contributions when you reach 30 years of pension credit and your EURD, you will stop accruing PSPP pension credit.

Can I start my PSPP pension before age 65 if I'm on LTIP?

Yes. You can start your PSPP pension any time after reaching age 55 with an age-based reduction, or you can begin an unreduced PSPP as soon as you meet an early unreduced retirement date under the PSPP. Note that prior to age 65, you must terminate your employment in order to start your pension. For more information, visit Types of retirement and Leaving the PSPP before retirement.

Please note that under many LTIP policies, LTIP payments are offset dollar for dollar by pension payments from the PSPP. Depending on the terms of your LTIP coverage, you may continue to receive LTIP benefits from your LTIP carrier until you reach age 65.

After I reach 30 years of pension credit and my EURD, how do I pay my pension contributions to OPB?

Canada Life will deduct your pension contributions from your LTIP payments and remit them directly to OPB.

If your LTIP payments from Canada Life are not sufficient to cover the full cost of your pension contributions, you may be required to pay your contributions to OPB directly. This could occur if your LTIP payments are offset by CPP disability benefits or WSIB benefits, or if you're participating in a return-to-work program.

If I elect not to make contributions when I reach 30 years of credit and my EURD, can I buy back pension credit for the period at a later time?

No. The Plan text does not permit members on LTIP to purchase pension credit for LTIP periods where they did not make their member contributions.

I'm beginning a return-to-work program. Will this affect my PSPP pension benefits?

No, participating in a return-to-work program will not affect your PSPP contributions or the credit you earn while on LTIP. You and/or your employer will continue to make your pension contributions as discussed above, and you will continue to earn your regular pension credit.

If your LTIP payments from Canada Life while you participate in your return-to-work program are insufficient to cover the cost your pension contributions, you may be required to pay your member contributions to OPB directly.

I qualify for Workplace Safety and Insurance Board (WSIB) benefits as well as LTIP. How will my PSPP pension benefits be affected?

Qualifying for WSIB benefits will not affect your PSPP contributions or the credit you earn while on LTIP. Even if you are not receiving any payments from your LTIP carrier, your pension benefits will be unaffected as long as you continue to qualify for LTIP. You and/or your employer will continue to make your pension contributions as discussed above, and you will continue to earn your regular pension credit.

Please note that under many LTIP policies, LTIP payments are offset dollar for dollar for payments from WSIB.