Group 5 – Police officers and firefighters
Group 5 participation is limited to police officers and firefighters. It requires that you and the union collectively bargain enrolment through an agreement and apply to the Municipal Pension Board of Trustees for approval.
Group 5 was established January 1, 2010. It has a different pension formula and higher contribution rates. Employees who are plan members earn a larger pension benefit than those in other groups for the same salary and service. This is valuable because police officers and firefighters can retire earlier.
You and unions with employees who meet the definition of police officer and/or firefighter may collectively bargain enrolment through an agreement and apply to the Municipal Pension Board of Trustees for approval. The agreement must comply with the plan rules and the terms and conditions for enrolment in group 5.
Moving from group 2 to group 5 is a permanent one-way change for you and your eligible employees.
For more information, see the Employer Group 5 Enrolment Application form.
Participation in group 5 is mandatory for all eligible employees covered by a collectively bargained agreement between you and the union that specifies membership in group 5.
Enrolment in group 5 is also mandatory for non-union firefighters and police officers hired after enrolment in group 5 (e.g., chiefs and deputies).
Non-union firefighters and police officer employees who are active plan members when you enrol in group 5 will be given a one-time opportunity to opt out of group 5 enrolment and remain in group 2.
Group 2 employees who do not meet the definition of police officer or firefighter will stay in group 2.
Once you enrol in group 5, you may not enrol new employees in group 2. New employees who are not eligible for group 5 and who cannot join group 2 will join group 1.
The cost to move to group 5 depends on a number of factors.
Total employer contribution rates for group 5 effective January 1, 2022:
- 14.67 per cent on all earnings
Your actual contribution rate depends on the salaries of your group 5 members and is calculated by the Pension Corporation following the current practice for all employee groups. Your rates will generally change every three years as the result of an actuarial valuation; however, the board may direct a rate change between valuations if necessary.
Group 5 employees and employers pay a higher percentage of salary into the inflation adjustment account because of the bigger lifetime pension provided by the higher accrual rate.
Your and your employees’ special agreement contributions must stop with group 5 enrolment. Refer to your collective agreement to determine your current contribution rates for comparison purposes.
For an estimate of employer costs in moving to group 5, contact the policy branch at email@example.com.
Your contribution rate
You will be given a separate organization ID for group 5 and will receive a separate contribution rate for group 5 employees.
We will calculate a contribution rate for your employees in group 1 and a separate contribution rate for employees in group 5.
Employees in group 5 can no longer contribute to special agreements. Collective agreements may need amending to reflect group 5 membership.
The employee’s special agreement contributions remain in the plan and earn interest until the member retires or transfers their pension benefit out of the plan.
Employees who remain in group 2 can continue to make special agreement contributions, if applicable.
You can set up special agreements for members in groups 1 and 2.
Other considerations for employees
Pensions will be calculated using the group 2 pension formula for all service before the date the employee joined group 5, and the group 5 pension formula for group 5 service. The bridge benefit will also be calculated using the employee’s combined group 2 and group 5 service.
The annual pension adjustment for employees in group 5 will be calculated using the higher accrual rate. This produces a higher pension adjustment and will reduce the amount employees can contribute to a registered retirement savings plan.
Employees who have had group 1 and group 5 service or who work concurrently in group 5 and another group will receive two member benefit statements each year so they see their current and future pension benefit estimates for each group separately.
As with other groups, when an employee reaches 35 years of service in the plan, they no longer make contributions or accrue further service at either accrual rate. You must continue to report service and salary because this information is used to calculate the employees’ highest average salary.