This handbook summarizes the main features of your University Pension Plan Ontario (UPP) in simple terms.
Explore definitions for key terms and acronyms that make up your plan.
The Plan’s contribution rates are set by UPP’s Joint Sponsors. As a UPP member, you currently contribute:
Under UPP, your annual contribution is determined by taking 9.2% of your annual pensionable earnings up to the YMPE plus 11.5% of your annual pensionable earnings over the YMPE. Your contribution is 100% matched by your employer. The YMPE is a threshold set each year by the federal government, based on the average wage in Canada. In 2024, YMPE is $68,500.
Different contribution rules apply during certain types of leaves of absence and special programs.
IMPORTANT: Under UPP, your earnings for contribution formula purposes will be capped at $201,900 (2024) increased annually in line with increases to the maximum pension rules under the Income Tax Act.
Footnote: UPP’s founding Universities are also responsible for any pre-conversion deficit funding, addressed through amortized special payments
No, UPP does not allow for additional voluntary contributions.
As a member of UPP, your pension is paid for life. The pension you receive is based on a formula that considers a few key components:
Your Best Average Earnings: average of your highest 48 months of pensionable earnings as a member, up to the maximum pension limit under the Income Tax Act.
Average YMPE(1): average of the YMPE established by the federal government in the last 48 months before you retire.
Your years of Pensionable Service: the amount of continuous service during which you’ve contributed to UPP and your prior plan, including any service you transferred in.
For each year of pensionable service after joining UPP, you will accrue an annual pension benefit, payable at your Normal Retirement Date, based on:
(1)Please note that this will change to the Year’s Additional Maximum Pensionable Earnings (YAMPE) for service on and after January 1, 2025. Like the YMPE, the YAMPE is set to increase each year to reflect wage growth in Canada.
Like all registered pension plans, UPP’s pension benefit is subject to the maximum pension limits under the Income Tax Act.
Under UPP, pension payments are on the first day of the month.
Your pension is calculated using the same formula as a full-time member. The pension formula uses your average annualized pensionable earnings and your pensionable service.
Annualized earnings are earnings that you would earn in a year if you were working on a full-time basis. For example: if you work 20 hours per week (50% of the full-time equivalent) and earn $35,000.00 annually, your annualized earnings would be $70,000.00 and your pensionable service would be 0.5 years of service to reflect your actual working hours.
No, while retirement savings vehicles like an RRSP may be accessed through programs like the Home Buyer’s Plan, funds in a defined benefit (DB) plan are locked in and cannot be withdrawn for that purpose. A DB pension plan is designed to provide you with a predictable and secure monthly lifetime pension.
Under UPP, you decide when to start collecting your pension.
The normal retirement date is the end of the month in which you reach age 65, but you can continue to work (and earn pension benefits) up to November 30th of the year you turn 71.
You can retire with an early unreduced pension as early as age 60 if your age plus your eligibility service equal at least 80 points. This is known as the “80 factor.” For example, if you were 62, you would need at least 18 years of eligibility service to qualify for an early unreduced pension (62 + 18 = 80 points). Because of the stipulation that you must be at least age 60 to retire early, a member aged 58 with 22 years of eligible service would not qualify for an early unreduced pension.
You can retire with an early reduced pension as early as the end of the month in which you turn 55. For example, if you decided to begin your pension at age 62.5 with 15 years of eligibility service, your pension would be reduced by 12.5% [65-62.5] x 5% per year). The reduction reflects the fact that by choosing to start your pension at a younger age, you will probably receive your pension for a longer period. In general, your pension starts on the first day of the month following your retirement date.
You can postpone your retirement until November 30th of the year in which you reach age 71. After this date your contributions will stop and you must elect a retirement income option.
If you’ve earned a pension under a participating university’s prior plan, different early retirement eligibility rules and reductions might apply to your prior service. For more information and to get a personalized retirement projection, please contact your university pension administration team.
We know projection tools are very important to members and are very helpful to the planning process. These tools are being developed as we build our member service infrastructure and systems.
Your UPP pension is determined by a formula that is based on your pensionable earnings and service. The longer you work and contribute to UPP, the more pensionable service you will have and the bigger your pension will be.
You can retire with no reduction to your pension at any time after reaching the Normal Retirement Date or UPP’s Early Unreduced Retirement Date, whichever is earlier.
The Normal Retirement Date is the last day of the month in which you turn 65. The Early Unreduced Retirement Date is the day your age and your eligibility service is 80 or more and you are at least 60 years of age.
You can retire as early as age 55, but if you have not yet reached your Early Unreduced Retirement or Normal Retirement Dates, your pension will be reduced by 5% for each year you are under age 65.
Your pension does not begin until you provide your employer with the necessary documentation and notice of your decision to retire. Documentation and notice requirements vary by participating employer and you should consult your university pension administration team on what those are.
Each year by June 30th, you will receive an annual statement providing a snapshot of your benefits as of December 31st of the previous year. Your statement includes the benefits you earned in your prior plan (if any), and your earliest retirement date and normal retirement date.
Inflation protection is a valuable benefit designed to increase the amount of your monthly pension through a cost-of-living adjustment based on the increase in the Canadian Consumer Price Index (CPI).
Prior plans – If your prior plan had inflation protection, it will still apply to your benefits earned under that plan. Prior plans have varying dates and definitions of inflation protection that only apply to benefits earned under those prior plan provisions. Please contact your university pension services team for details.
UPP – When you retire and begin receiving your pension, the portion attributable to UPP benefits will be subject to funded conditional indexation. This means that any indexation adjustments will be determined by UPP’s Joint Sponsors. UPP’s target funded conditional indexation is 75% of the increase in CPI for Canada but may be less based on the Plan’s overall financial health and Funding Policy. Indexation of your UPP benefits is not guaranteed, meaning if an indexation adjustment is made in any given year, it does not necessarily mean an adjustment will be made in any future year.
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