Seeking to plug its funding gap, the sponsors of OMERS primary pension plan have approved increases to contribution rates for 2012.
For members whose normal retirement age is 65, the contribution rate for earnings up to the CPP earnings limit will rise to 8.3%, up from 7.4% in 2011. For earnings over the CPP limit, the rate rises to 12.8%, from 10.7%.
For members whose normal retirement age is 60, the contribution rate for earnings up to the CPP limit rises to 9.4%, from 8.9%. On earnings over the CPP limit, the rate will decline from 14.1% in 2011, to 13.9% in 2012.
In 2010, OMERS announced a three-year contribution rate increase for the OMERS Plan, totalling 2.9% per side (members and employers).
- A flat 1% 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 1% average for 2012. These rates will provide the Plan with the total contributions required in accordance with the SC decision.
- The SC will set contribution rates for 2013, following a comprehensive review. These rates will average 0.9% per side.
These adjustments are based on careful consideration of rates and benefits within the total OMERS membership. The SC will continue to review the principles for allocating and determining contribution rates for all members.