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Calculating your pension and contributions
- Members
- How your plan works
- Calculating your pension and contributions
How your plan works
UPP is a defined benefit (DB) pension plan. The pension you receive is based on a formula that considers a few key components including your earnings and years of service. The investment earnings of the plan, as well as the contributions made by you and your employer, are what fund your pension.
Your matched contributions
The amount you contribute to the plan each year is based on your pensionable earnings, the average YMPE (a threshold set each year by the federal government, based on the average wage in Canada)* and UPP’s contribution rate. Your employer contributes an equal amount. Contributions flowing into the plan are invested by investment professionals bound by fiduciary duty to act in your best interests.
As a UPP member, you currently contribute:
The plan’s contribution rates are set by UPP’s Joint Sponsors and are subject to change based on the plans’ financial status.
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 employer matches 100% of your contributions.
The YMPE is a threshold set each year by the federal government, based on the average wage in Canada. In 2024, the 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.
*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.
Calculating your pension
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: average of the YMPE (Year’s Maximum Pensionable Earnings) 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, 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.
UPP’s pension formula
Like all registered pension plans, UPP’s pension benefit is subject to the maximum pension limits under the Income Tax Act, which increases annually.
Calculating your pension
UPP provides personalized information that makes it easy to keep track of your pension’s growth and see how much your monthly pension would be at various retirement dates. Each year, you will receive an annual statement providing a snapshot of your benefits, including those from your prior plan benefits (if any), and your earliest retirement date and normal retirement date.
The Pension Estimate Calculator will be available in the myUPP Member Portal later this fall.
Members of prior plans
If you were earning pension benefits under your university’s or employer’s prior pension plan when it converted to UPP, you automatically become a member of UPP on the day your university or employer joins. Pension benefits earned under your prior plan remain unchanged and are now payable from UPP.
Please refer to your university’s UPP Quick Guide for information on how the pension benefits earned under both your prior plan and UPP work together to provide you with a secure retirement benefit when you retire.
Frequently asked questions
Can I make additional voluntary contributions to UPP?
No, UPP does not allow for additional voluntary contributions.
If I switch from full-time employment to part-time employment, can I stop contributing to the Plan?
You cannot stop your contributions upon transitioning from full-time to part-time. Once you have started contributing to the Plan, you continue to make contributions until your employment ends.
I work part-time. Is my pension calculated differently?
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.
For more information, please see page 10 of UPP’s Member Handbook.
Can I withdraw a portion of my pension funds to purchase a house?
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.
Does UPP have projection/calculator tools?
We know projection tools are very important to the retirement planning process. The Pension Estimate Calculator will be available in the myUPP Member Portal later this fall. This tool will allow you to estimate your future pension using various scenarios, including different ages, dates, and pensionable earnings increases.
- © 2024 University Pension Plan