Why Contributory Earnings Matter

While you’re working, you pay OMERS Plan contributions on your regular “contributory” earnings – excluding additional amounts such as overtime pay and most one-time, lump-sum payments. And then when you retire, these same contributory earnings are used to calculate your pension (the “best five” earnings in the OMERS Plan pension formula).
There are two caps on contributory earnings:
 
  1. Cap on incentive pay – post-2010 contributory earnings are capped at:
    • 150% x your contributory earnings before incentive pay “Incentive pay” is earnings related to performance-based bonus payments and similar pay arrangements. Bonus payments for service retention (common in the police/fire sectors) are not considered incentive pay.
  2. Additional cap – total annual contributory earnings are limited to seven times the CPP earnings limit effective:
    • January 1, 2014 for members who enrolled on/after January 1, 2014; and
    • January 1, 2016 for members who enrolled before January 1, 2014.