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OMERS boosts contribution rate to plug deficit

Posted by on Jul 6, 2011 in Retirement | 0 comments

Global Pensions | 06 Jul 2011 | 11:30

Raquel Pichardo-Allison

CANADA – The Ontario Municipal Employees Retirement System will increase its contribution rate in 2012 as part of a pre-agreed plan for yearly rate hikes in the three years to 2013.

Employer and employee contribution rates will increase by about 1% each. Contribution rates for members retiring at 65 and earning up to C$48,300 ($50,127) will hit 8.3% in 2012. The rate can vary depending on earnings and retirement age.

In 2010, the OMERS Sponsors Corporation, the pension funds’ plan sponsor, put in a place a three-year plan to increase rates a total of 2.9% in an effort to make up a funding shortfall. (Global Pensions; 6 July 2010)

Contributions will increase 0.9% in 2013.

In 2010, the C$53bn plan reported a funding shortfall of C$4.5bn.

The contribution rates will be adjusted once the plan hits full funding, OMERS said.

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