She'd never had the opportunity to be part of a pension plan until roughly one year before retirement when her organization joined OPTrust Select – a defined benefit (DB) pension offering designed for Ontario workplaces in the charitable, nonprofit and broader public sectors.
When her organization decided to offer a pension, Maxine said she was very interested in learning more about it because she saw the benefit in having a secure pension plan, yet she didn't know what that would look like in the social services sector.
Maxine's employer joined OPTrust Select in April 2019 and she retired on June 30, 2020 at the height of the pandemic. "That had always been my plan to retire on that date – so I didn't let the pandemic interfere with that."
Despite being so close to retirement when Maxine became an OPTrust Select member, she was able to take advantage of the option to buy back past pension service. A "buyback" means that if an organization joins OPTrust Select and someone had worked there previously, they have the option to buy back that period of employment service before they joined the pension plan. Buying back past service can help members increase their pension in retirement.
Maxine used a portion of her registered retirement savings plan (RRSP) to pay for her buyback. "And because it was going straight into the plan there was nothing deducted in terms of tax because it wasn't being cashed, it was just being rolled into what my pension would be."
Access to a pension means knowing what part of her monthly income will be there for certain, she said. "The rest of my pension income is based on, not all of it - but a great deal of it, is based on RRSP contributions and looking at how to invest those properly," she added, noting the investment piece was always a struggle for her.
If Maxine were to tell her younger self anything about retirement security, it would be to start planning and saving earlier because people don't realize how quickly the time will go by. Further, people must recognize that government plans alone can't be relied on, she noted. "I think that you need to look at retirement income as a layering of incomes as opposed to, 'Oh I'm going to have this big fat pension that I'm going to draw.' You need to have three or four pots that you're going to be drawing your money from so that you have some balance to it."