Integration with Old Age Security Option

August 18th, 2015

 In 2012 the Government of Canada made changes to the Old Age Security (OAS) program. People born between April 1, 1958 and January 31, 1962, will be eligible to receive their OAS benefit between the age of 65 and 67, depending on their birth date. People born on or after February 1, 1962 will be eligible to receive their OAS benefits at the age of 67.

The changes to the Old Age Security program affect a voluntary option known as "Integration with Old Age Security (OAS)" that MEBP offers to members who are under age 65 on their retirement date.

The option allows the Municipal Employees Pension Plan (MEPP) to add an "advance" to a member's monthly pension payment. The advance is paid from the date of retirement to age 65. At age 65 the member's MEPP payment is reduced in order to recover the advance payments issued to the member. This reduction to the MEPP payment continues for the member's lifetime. Note: The Income Tax Act (Canada) currently does not allow pension plans to offer an integration option that pays an advance payment beyond age 65. 

In the past, members could offset the reduction by applying for their OAS benefits at age 65. However, due to changes made to the OAS program, this is no longer the case for members born April 1, 1958 or later. If these members choose the Integration with OAS option, there will be a gap in their retirement income between the ages of 65 to 67. 

For this reason, effective January 1, 2016, the MEBP Board of Trustees has approved the following changes:

  • The Integration with OAS option will no longer be offered to members who were born April 1, 1958 or later and have a retirement date of January 1, 2016 or later.
  • Members born April 1, 1958 or later who have a retirement date of December 31, 2015 or prior will continue to be offered the OAS integration option.
  • Members born prior to April 1, 1958 will continue to be offered the integration option at retirement. 

If you have any questions, please contact our office at 1-800-432-1908 Ext. 244.
Additional information on the Old Age Security program can be obtained by calling Service Canada at 1-800-277-9914 or go to the Service Canada website at www.servicecanada.gc.ca