OPB News for Retired Members

Retirement can be an exciting time of life, but it can also present new challenges. After years of working, some retirees may find it difficult to adjust to a new routine and purpose, which can lead to feelings of loneliness, anxiety and even depression.

The World Health Organization (WHO) launched a Commission on Social Connection(opens in a new tab), with the focus of addressing the “pressing health threat” of loneliness noting that it impacts the health and well-being of all age groups across the world. One in four older people experience social isolation.

On the flip side, happiness is essential for physical and mental health, especially in retirement – a Forbes(opens in a new tab) article noted that studies show happy retirees are more likely to have better overall health, fewer chronic conditions, and a longer life expectancy.

We recently spoke with a few retired OPB members to find out how they are staying active and socially engaged in retirement. They also shared advice about how to lead a happy, healthy retirement:

Stay physically active

Frank has been retired since 2005, living in Thunder Bay, and has been staying active through running, cycling, swimming, and kayaking. He has participated in four IRONMAN competitions. Frank shared this advice for living a happy retirement. “It’s a sequence of things, but it starts with your health, you need your health to be productive and happy. To be healthy, there are three dimensions, the physical, mental, and social aspects,” Frank said.

Andy retired in 2020 and has been enjoying his time so far. He believes it is important to exercise in your younger years, so you can enjoy your time in retirement. His daughter recently adopted a dog, which he helps take care of and it gets him out for daily walks.

Judy left the Ontario Public Service in 2001 and pursued a consulting career for almost two decades before retiring a few years ago. She developed a passion for rowing in university and it has continued. She spends much of her time rowing and volunteering at the Argonaut Rowing Club in Toronto, where she’s been an avid member for 40 years.

Connect with nature

Frank discussed the importance of picking an activity that gets you out into nature, such as hiking with friends. “The human body needs to commune and be in contact with nature to have a stable physical and mental state,” he said.

And he’s right, according to a CBC article(opens in a new tab), an increasing amount of research suggests that that being outdoors can benefit mental health(opens in a new tab), boost memory(opens in a new tab) , improve cardiovascular health(opens in a new tab) and help us live longer.

Similarly, when Judy was working, she enjoyed her daily routine of getting up every morning and walking her dog in the nearby ravine. “I enjoy having a routine and getting outside. Having a connection to nature is so important, in addition to rowing, I still make a point to walk in the ravine for an hour every day,” Judy said.

Train your brain

Since retiring, Andy has been busy working on a master’s degree in theology at Tyndale University in Toronto. He just completed his 10th course and is doing a combination of remote and in-person classes. He has three more years to go before he completes the program. He enjoys taking his time to accomplish the degree at a pace that works well for him, still allowing him to enjoy other aspects of retirement.

Constantly exercising your brain with different memory, focus and functionality challenges is especially important as we age. To learn more about different exercises to keep you mentally sharp, read, 13 Brain Exercises to Help Keep You Mentally Sharp(opens in a new tab).

Create a community

Frank volunteers at a few organizations including Poverty Free Thunder Bay and the local United Way chapter where he participates with their evaluation team to determine how to spend the money donated by community members by assessing applications and making recommendations to the United Way board.

Andy is an avid volunteer who teaches bible studies at his local church as well as reading to residents in a long-term care home a few times a month – which he did even throughout the pandemic because he knew how it important it was.

Judy volunteers doing administrative work at the Argonaut Rowing Club. She is also the Chair of the Dominion Day Regatta Association, now in its 140th year, a traditional regatta involving canoeing, rowing and dragon boat racing that takes place annually on Toronto Island. She has served as a rowing umpire for more than 24 years and takes great satisfaction in training new umpires. In 2022, she was inducted into Row Ontario’s Hall of Fame(opens in a new tab). Judy shared valuable advice when asked how one can lead a happy, healthy retirement, “Become engaged in a community, whether it be through a sport organization, faith-based groups, social services, health care, environment, or any other group. There are all kinds of things you can do to give back to your community and you get fulfillment from doing so,” Judy said.

Plan ahead

Frank shared some valuable advice on planning ahead for the future. “Ten per cent of your time should always be on the future – you can plan all you want, but be flexible, revising your plan is part of life and life is always changing,” Frank said. He advised members nearing retirement to take the time and effort to look at their future state and design the retirement that will work best for them.

Similarly, Andy shared some valuable tips. “You need to set your goals and a target of where you want to go and how you want to spend your time in retirement. Finding a good financial advisor who can offer valuable advice to help you with your personal financial situation is key,” Andy said.

Judy has been receiving her pension since 2016 and said that it’s reassuring to know she has the financial support of a pension in retirement. “After having worked 15 plus years for the Government of Ontario, it’s nice knowing my years of hard work and earning a pension are giving back to me,” Judy said.

Whether you’re considering returning to work for the financial or social benefits or to exercise your brain, there are important factors to consider before making your decision.

How returning to work can impact your pension

First, it’s important to understand how your re-employment earnings can impact your PSPP pension.

If you return to work for a PSPP employer and you don’t rejoin the Plan, there are limits on the amount you can be paid in any calendar quarter before your pension is affected. This is referred to as the “quarterly re-employment earnings limit.” This means that, if your gross earnings in any calendar quarter exceed your quarterly re-employment earnings limit, you’ll need to repay OPB a portion, or all, of your pension for that time. We refer to the amount you must repay as a “pension overpayment.” Keep in mind that not all rules apply to all groups. Confirm your quarterly earnings limit by reviewing your Confirmation Statement that you received when you retired. You can also check the letter you received when you turned 65.

Budgeting

It is important to know what your expenses are in retirement, so you know whether your income is adequate. Write down your current expenses to determine whether you should reduce the amount of income that you intend to withdraw from your savings or reduce your expenses if your budget indicates that you have a deficit. Having more incoming cash (such as your salary or pension) than outgoing cash (expenses) not only gives you a healthier financial picture, but it provides a buffer in case of unexpected expenses that can arise in retirement.

Strategies to reduce your taxable income

If you decide to return to work while collecting your PSPP pension, depending on the impact of the re-employment earnings rules mentioned above, your taxable income may increase. Below are some strategies to consider:

1. Pension splitting and tax credits - Your PSPP pension can be split with your spouse at any age. This can help to reduce your taxable income. The pension income tax credit (Line 31400(opens in a new tab)) can be used by a spouse with a pension, irrespective of whether it’s the spouse’s own pension income or as a result of pension splitting.

*Members receiving Retirement Compensation Arrangement benefits are eligible for pension income splitting, provided certain conditions are met, including that the retired member is at least age 65.

2. Canada Pension Plan (CPP) - One option to help reduce your taxable income while working is to delay collecting your CPP pension. The normal age to receive the CPP pension is 65; however, the CPP pension can be taken as early as age 60 or as late as age 70. This will allow you to control the amount of income you receive and, more importantly, lower your taxable income.

If you choose to delay your CPP pension until after age 65, your CPP entitlement will be higher than it would be before age 65. Learn more by reading our article on your pension and CPP integration.

Your CPP pension is reduced by 0.6% per month if you decide to take it before age 65 and is increased by 0.7% per month if you delay after age 65. For example, if you were to take your CPP at age 62, your monthly CPP pension would be reduced by 21.6% (0.6% X 36 months before age 65). Alternatively, if you chose to delay collecting your CPP to age 67, then your monthly CPP pension would be 16.8% higher (0.7% X 24 months past age 65). To find out your CPP entitlement, contact Service Canada(opens in a new tab) and they can provide you with an estimate of your CPP entitlement at ages 60, 65 and 70.

Also, keep in mind that when returning to work and earning a salary, you may be required to make CPP contributions depending on your age.

3. Old Age Security (OAS) – If you are 65 years of age or older and eligible, you can apply to receive an OAS pension. You can delay receiving OAS as late as age 70. Your OAS pension will be higher depending on how long you delay beyond age 65. Choosing to delay your OAS pension can help reduce your taxable income while you are also earning a salary and, if applicable, your PSPP pension.

The OAS pension is increased by 0.6% per month after age 65. For example, if you were to start collecting your OAS pension at age 67, your monthly benefit would be 14.4% higher than your OAS entitlement had you started collecting it age 65.

It’s important to note that if you decide to receive your OAS pension while earning a salary, some or all of the OAS pension may be clawed back if your net income exceeds certain thresholds. Avoiding this recovery tax can be another benefit of deferring OAS. To learn more about the thresholds, speak with your financial advisor.

4. Registered Retirement Income Fund (RRIF) income - Another strategy to reduce your taxable income when you return to work is to delay receiving your RRIF income. If you hold investments in Registered Retirement Savings Plans (RRSPs), the account must be converted into RRIFs, annuity, or lump-sum cash payment by December 31 in the year when you turn 71. If you convert a RRSP to a RRIF, you must start to withdraw your minimum RRIF income no later than December 31 of the following year.

When you withdraw the minimum RRIF income, your financial institution is not obliged to withhold taxes and as a result, you may owe taxes when you file at the end of the year. Projecting your tax liability early in the year enables you to set aside the funds that will be due to Canada Revenue Agency. You may also request that your financial institution withhold additional taxes to make up the difference. If you are 65 or older, consider splitting your RRIF income with your spouse to help reduce your taxable income. To learn more, discuss with your financial advisor.

Revisit your plan regularly

As we experience retirement and navigate through changes in our life, having a flexible plan is key. A good policy is to revisit your plan once or twice per year. This will enable you to examine your income needs, plan accordingly and adjust. This is especially true for larger and unplanned expenses that may pop up in retirement. Creating and maintaining a flexible, balanced plan, and reviewing your budget regularly will allow you to determine how much longer you may want or need to work for, while allowing you to enjoy your retirement.

OPB’s e-services portal is an easy and secure way to connect with us. If you haven’t yet registered for your e-services account, please do so. The benefits include:

• Improved accessibility features
• Easy updating of personal information
• Access to OPB’s Secure Document Upload tool
• Choosing to receive your COLA letter and/or Retired Member Statement exclusively online
• Book a 1-on-1 meeting with one of our in-house Advisors, who are all Certified Financial Planners®
• Sign up for optional e-alerts to receive more frequent updates
• Easy password reset

Register for e-services today. Have your OPB client number on-hand to help us serve you faster. If you’re having difficulty activating your account or using any of the tools in e-services, our knowledgeable staff can assist you.

Earlier in 2023, we shared that two of our long-serving members of OPB’s Executive Leadership Team (ELT) will be retiring – our President and Chief Executive Officer (CEO), Mark Fuller, and our Executive Vice President and Chief Pension Officer (CPO), Peter Shena. Peter will retire at the end of March 2024 and Mark will retire at the end of 2024. Peter will be available throughout 2024 as Chief Transition Officer to assist with a smooth transition and to provide leadership continuity on important initiatives.

We are pleased to welcome Darwin Bozek, President and CPO, who will transition to become OPB’s President and CEO at the end of 2024, upon Mark’s retirement. Darwin is a seasoned pensions executive with more than 30 years as a senior leader in the public service. Since 2017, he has served as President and CEO of Alberta Pensions Services Corporation.

Darwin will work closely with our executive team to gain a deep understanding of the PSPP and our advisory approach to continue delivering exceptional services and retirement planning support to our members. Darwin will lead the selection of the permanent CPO, whom we expect to start before the end of 2024.

To read the full announcement, see OPB announces new President & Chief Pension Officer.

OPB is committed to advancing Environmental, Social and Governance (ESG) issues both within our operations and within our investments because we believe it is important to our long-term success.

Over the past few years, we have worked closely with our investment manager, the Investment Management Corporation of Ontario (IMCO), to advance ESG within our investment portfolio and we have also focused on improving our communications and transparency with members around our progress.

In 2022, we invited our members to complete our ESG feedback survey designed to help us better understand what ESG-related issues and topics matter most to our members and how our members would like us to communicate our progress with them. In that survey, 73% of our members told us they felt ESG was an important consideration within our investments. Investment returns were also very important to our members with 50% of members sharing that considering ESG and investment returns are both important, 27% of members shared that investment returns should be the priority and 23% of members shared that ESG should be the primary focus within investments.

We want our members to know that we believe integrating ESG into the investment process is what best positions us to improve returns over the longer term, which in turn helps the pension plan and members.

In early spring, we will be releasing our inaugural ESG report. The report will discuss our progress on ESG and Diversity, Equity and Inclusion (DEI), as well as how we worked with IMCO to advance ESG within our investment portfolio for 2022 and part of 2023. The report will share information about our ESG policies, commitments, and educational content on key ESG topics to explain how our goal of sustainably managing the Plan will reduce our exposure to risk and continue protecting the pension promise for years to come.

According to the Government of Canada, fraud is the top crime against older adults. Even though fraud can target anyone, older individuals are targeted more frequently, and are vulnerable to scams because they may be more accessible, trusting, and may not have family or friends available to ask for a second opinion.

People who commit frauds and scams use a variety of tactics to target someone such as the Internet, texts, emails, phone calls and door-to-door visits. Common types of fraud and scams include identity theft, credit/debit card fraud, online scams, phone, and door-to-door scams.

Here are some simple actions you can take to protect yourself:

• Keep your personal documents in a safe place (don’t carry your birth certificate, passport, and/or SIN card)
• Protect your PIN and account passwords (cover your PIN when entering it in public and use strong online passwords)
• Don’t share your PIN and passwords with anyone (if you need to document your passwords, store them in a secure location)
• Shred any bills and banking statements
• Check your bank and credit card statements regularly for charges that look suspicious
• Don’t give your credit card number, bank account, or personal information to someone over the phone, at the door, or over the Internet unless you know the person or organization, or if you contacted them first
• When using social media sites, frequently check your privacy settings
• Be suspicious if you receive a phone call from a family member urgently looking for money to bail them out of a difficult situation
• Be cautious of someone you don’t know asking you to send them money or to return money you may have ‘accidentally’ sent them
• Before hiring a contractor to work on your home, ask for proof of identity and check references

Interested in learning more? Read Protecting Yourself from Online Fraud and Identity Theft.

Source: Canada.ca(opens in a new tab)