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Ontario Updates Public Sector Retiree Benefit Plans

Web posted on February 21, 2014

The Ontario government will transition to a cost-sharing model for retiree benefits for employees retiring on or after Jan. 1, 2017. There are more than 84,000 active members of the Ontario Public Service and other employers enrolled in Ontario Public Service pension plans.

"Our government respects and values the hard work and dedication of the Ontario Public Service. OPS employees will continue to have a generous retirement benefits package. Equally sharing the cost of benefits with future retirees will align Ontario with most other Canadian jurisdictions, the private sector and other public sector organizations." John Milloy, Minister of Government Services.

This will bring Ontario Public Service retiree benefits in line with other public sector organizations where retirees are often asked to contribute up to 100 per cent of their benefits premium. Retiree benefits are not a provision of the pension plans nor are they a pension benefit.

Current retirees from the Ontario Public Service will not be affected by these changes. About 3,000 - 4,000 employees begin to receive a pension and retiree benefits from the Public Service Pension Plan or the OPSEU Pension Plan each year.

Employees who do not have 10 years pension credit in the pension plans by Jan. 1, 2017 will have to have at least 20 years of pension credits and retire to an immediate unreduced pension in order to qualify for retiree benefits.

Key features of the new model will:
* Require employees retiring on or after Jan. 1, 2017 to pay 50 per cent of their benefits premiums (e.g. life, health, dental and vision). Currently the government pays 100 per cent.

* Change the eligibility period for retiree benefits from 10 to 20 years for employees hired on or after Jan. 1, 2017.

"We must continue to manage costs in a responsible and fair way. With half of all government spending going to compensation, including post-retirement benefits, managing these costs is essential to ensuring sustainable public services that Ontarians rely on." Charles Sousa, Minister of Finance.

Taking a measured and moderate approach to Ontario's finances is part of the government's economic plan that is creating jobs for today and tomorrow. The comprehensive plan and its six priorities focus on Ontario's greatest strengths - its people and strategic partnerships.