# What To Do With OMERS Pension?



## Smoothie (Jul 11, 2011)

Hello all,

A friend of mine has quit her job and has to decide what to do with $100K in her OMERS Pension.
She is 34yo. She's taken the big step of going back to professional school. She will soon graduate with income potential $200-$400K annually. If the best predictor of the future is the past, she'll have no financial troubles in her new career, she'll do very well.

Her OMERS documents show a pension of about $1K monthly starting age 65.

She has a chronic illness which the latest data show will shorten her life expectancy about 10 years.

Her options are as I understand it LIRA or keep the money in the plan until retirement. She would use the LIRA to invest as part of a balanced portfolio.

Any opinions from pension gurus about what to do?


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## the-royal-mail (Dec 11, 2009)

Smoothie said:


> ...to invest as part of a balanced portfolio.


Red flag. In this option, she's not going to hand the money over to an advisor for purchase of mutual funds, is she? "Balanced portfolio" is normally advisor speak outside of smart CMFers.


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## MoneyGal (Apr 24, 2009)

Keep it and consider it as (part of) the bond allocation in the portfolio. She can take more risk with the remainder of the portfolio with the pension as ballast.


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## Beaver101 (Nov 14, 2011)

Smoothie said:


> Hello all,
> 
> A friend of mine has quit her job and has to decide what to do with $100K in her OMERS Pension.
> She is 34yo. She's taken the big step of going back to professional school. She will soon graduate with income potential $200-$400K annually. If the best predictor of the future is the past, she'll have no financial troubles in her new career, she'll do very well.
> ...


 ... are you sure your professional friend needs advice from a DIY forum when she worked for *OMERS? *

*Who are we*? http://www.omers.com/investments/investments_who_we_are.aspx
*What do we do*? http://www.omers.com/investments/What_We_Do.aspx


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## Feruk (Aug 15, 2012)

OMERS is huge. She could easily work for one of the subsidiaries like Omers Energy.


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## MoneyGal (Apr 24, 2009)

OP didn't say his/her friend worked for OMERS, but that they had an OMERS pension...friend could be a school secretary, librarian, cop, bylaw enforcement officer, CAS worker, etc. etc. etc. 

http://www.omers.com/pension/Plan_Overview.aspx


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## Beaver101 (Nov 14, 2011)

Fair enough but what does *OMERs *actually do? for their clients ... librarian, cop, CAS worker, etc.?


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## Smoothie (Jul 11, 2011)

MoneyGal said:


> Keep it and consider it as (part of) the bond allocation in the portfolio. She can take more risk with the remainder of the portfolio with the pension as ballast.


Thanks MoneyGal, thats a good point.


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## OhGreatGuru (May 24, 2009)

Beaver101 said:


> Fair enough but what does *OMERs *actually do? ...


OMERS (Ontario Municipal Employees Retirement System) was established in 1962 as the pension plan for employees of municipal governments, school boards, libraries, police and fire departments, Children's Aid Societies and other local agencies throughout Ontario.


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## Daniel A. (Mar 20, 2011)

Leave it in the plan they know best with the cheapest cost.


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## BC Eddie (Feb 2, 2014)

I was in the same position as the person in the original post back in mid 90's. I opted to take the money out and invest on my own. I did "OK" but in hindsight I wish I had done as MoneyGal suggested and left it in the plan. I have no other guaranteed retirement income (other than CPP and OAS), everything else being in stock and bonds. So leaving it in OMERS would have given me an additional "annuity". While I am now happy with the performance of my investments there is a lot to be said about being diversified and having a guaranteed portion as well for additional peace of mind.


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## sags (May 15, 2010)

For most people, their retirement income is comprised of bits and pieces..........rather than one large component.

A pension payment here, CPP benefits, OAS benefits, and some retirement savings...........the income is cobbled together.

As such, every bit of "guaranteed" income relieves some stress from the equation for the retiree.

I think MoneyGal gave the best advice as well.


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## Gimme the Green (Feb 4, 2014)

Interesting this thread came up. My wife is in a somewhat similar situation with her OMERS pension. Same age, same amount, however she left for the same position at a non-omers employer. My initial thought for her is keep the pension due to the possibility(good possibility) that she will one day work for an omers (or partner plan) employer at some point. Any chance of the OP's friend doing the same?


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## james4beach (Nov 15, 2012)

The kind of pension you want to keep is one that you are confident is fully funded, can make future payments, and isn't going to disintegrate (examples of recent failing pensions: Nortel, Detroit municipal employees, everything in Spain)

I don't know anything about OMERS specifically but this is the first thing you should investigate. Is this an at-risk pension? A pension is an obligation to you... it's not an account that holds money for you specifically. You must question whether the pension will be around when you need it. Yes, if the pension is solid you can treat it like "bond exposure". If it's not solid, then it may evaporate just when you need it... like Detroit's municipal pension.

You have to investigate this, read lots of articles, question the authors of the articles (who do they work for? what is their bias?). There certainly are doubts out there that OMERS is sustainable. There could be legal or political changes that affect the pension.

The advice to leave it in OMERS because "they know best" makes me cringe. Pension plans are all ponzi schemes, to some degree. They obviously don't have all the money, and they obviously require new revenue (even tax revenue, in the case of OMERS) to keep the scheme going. Can they pull it off by the time it's time to collect your 100k? That's the important question


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## Gimme the Green (Feb 4, 2014)

Good advice from James. Have to have confidence in the plan if you want to let them keep your money. I myself work for an omers employer and although I'm sure it will be there for me in 23ish years, I also know it won't look like the plan we see today. They are always trying to tweak the way it works, ie: make people work/contribute longer, pay out less.


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