Plan Basics

UPP members handbook


Our Member Handbook [PDF] outlines key information for each stage of your UPP pension journey. We’re there for you every step of the way.

Did your pension plan recently convert to UPP?

If your plan has converted to the UPP, it’s important to read both the UPP Member Handbook and your University’s Quick Guide to understand how your UPP pension fits into your overall retirement plan.

If you were earning pension benefits under your university’s prior plan when it converted to UPP, you automatically become a member of UPP on the day your university joins. Pension benefits earned under your prior plan remain unchanged and are now payable from UPP.

You can still:
• get information about your prior plan through your university’s website and pension administration team, and
• use the pension calculator on your prior plan’s website to see your benefits earned under both your prior plan and UPP and explore retirement options.

Your member services will continue as usual, through your existing university plan administrator.

If you are a member of one of the founding universities who joined UPP in July 2021, and you have any questions about your pension plan or benefits, please contact your trusted university pension services team listed below.

Queen’s University Pension Services

Website: https://www.queensu.ca/humanresources/total-compensation/pension-services
Email
Tel (613) 533-2070
Fax: (613) 533-6196

University of Guelph Human Resources

Website: https://www.uoguelph.ca/hr/staff-faculty/university-pension-plan-upp 
Email
Tel (519) 824-4120 ext. 52142

University of Toronto Pension Services

Website: https://people.utoronto.ca/careers/retirement/
Tel 1 (888) 852-2559

Plan Basics

If you were earning pension benefits under your university’s prior plan when it converted to UPP, you automatically become a member of UPP on the day your university joins.

New and existing employees not enrolled in a prior plan

To join UPP, you must be in an eligible employment class, which varies by participating university. Please contact your university pension administration team for questions about your eligibility or to discuss new membership.

If you are in an eligible employment class, there are two ways to join the Plan:

Full-Time Continuous Employees automatically join the Plan:

  • the first day of the month (or first full pay period if paid bi-weekly) on or following the date you join a participating employer, or
  • when you become full-time.

Other than Continuous Full-time Employees – that is, employees of a participating employer who do not qualify as a full-time employee – can choose to join UPP on the first of any month after meeting one of the following conditions:

  • you earn at least 35% of the Canada Pension Plan (CPP) earnings limit, also known as the Year’s Maximum Pensionable Earnings (YMPE); or
  • you work 700 or more hours in a year.

At least one of these conditions must be met in each of the last two consecutive calendar years before applying for membership.

The YMPE is a threshold set each year by the federal government, based on the average wage in Canada. We use it to calculate your pension and determine how much you need to contribute to the Plan.

The University Pension Plan (UPP) allows funds to be transferred from a previous employer’s registered pension plan to UPP, under certain conditions, to be used to purchase pensionable service in the plan.

If eligible, transferring funds may allow you to:

  • Receive additional pensionable service under UPP
  • Increase your eligibility service, which may help you qualify for an unreduced, early retirement pension sooner.
Who Is Eligible

If you earned pensionable service with your previous employer immediately before joining UPP, you may be eligible to transfer all or a portion of the value of your benefit entitlement to UPP if all the following apply:

  • You stopped being a member of your previous employer’s pension plan within 12 months of becoming a member of UPP (or within 12 months of joining the university’s prior plan, whichever is earlier), and
  • You apply for the transfer within 12 months of becoming a member of UPP (or within 12 months of joining the university’s prior plan, whichever is earlier), and
  • Your immediately previous employer’s plan is a Canadian registered pension plan (RPP),
  • You are entitled to receive a benefit from your previous employer’s plan, and
  • Your previous plan allows transfers.

Please note that if you previously initiated a transfer to your employer’s prior plan, you are not eligible for a transfer under the provisions of UPP. UPP does not allow transfers from RRSPs and LIRAs, except as a shortfall payment if the funds in your previous plan are not enough to purchase the full amount of pensionable service in UPP.

Requesting A Transfer

The first step is to complete and return a Pension Transfer Application within 12 months of becoming a member of UPP (or within 12 months of joining your employer’s prior plan, whichever is earlier).

Please keep in mind that the process for requesting and completing a transfer can be lengthy. The table on the next page outlines important items and action steps.

Steps to transfer
Step Action
Submit an application Complete and submit a Pension Transfer Application to UPP within 12 months of joining UPP.
Request data from your previous pension plan To process your application, UPP will send a data request to your previous pension plan administrator, which will include a deadline for providing information.
Cost quote Once all the requested data is received, UPP will determine the cost to purchase the pension credits from your prior pension plan in the UPP plan. The cost is the actuarial value of the pension based on UPP’s established administrative guidelines. The maximum UPP service you can purchase is limited to the service you earned in your previous employer’s plan.
Review options A transfer in election package will be sent to you to review the total cost and your payment options. The package will include:

  • The total cost to purchase the pension credits from your prior pension plan in the UPP plan,
  • Payment options for any shortfall, if the funds available for transfer in your prior pension plan are less than the total cost,
  • The impact to your UPP pension if you complete the transfer of funds, and
  • All required forms to complete the transfer of funds.

You will have a limited time to review the information and decide if you wish to purchase some, all or none of the pensionable service. If you do not respond by the deadline, your application will be closed and you will lose the opportunity to transfer.

Transferring funds from a previous plan to UPP is an important decision. It’s a good idea to seek advice from an independent financial advisor.

Transfer funds Once all the requested data is received, UPP will determine the cost to purchase the pension credits from your prior pension plan in the UPP plan. The cost is the actuarial value of the pension based on UPP’s established administrative guidelines. The maximum UPP service you can purchase is limited to the service you earned in your previous employer’s plan.

If you decide to transfer funds from your prior pension plan to the UPP plan, you will contact your prior plan administrator to request a transfer of funds to UPP, along with the required forms from your transfer package. The transfer of funds from your previous pension plan to UPP may take several months to complete.

When you transfer pension service, UPP is required to calculate a “past service pension adjustment” (PSPA) and report it to the Canada Revenue Agency for approval. A PSPA represents the value of the pension you wish to purchase. It reduces your RRSP contribution room for the next taxation year. Funds transferred from your prior pension plan, RRSP or LIRA will reduce the PSPA.

Shortfall payments

If the funds in your previous plan are less than the total cost to purchase the full amount of pensionable service in UPP, you may choose to make a one-time lump sum cash payment and/or transfer funds from an RRSP to purchase the remaining service. No other payment options are allowed.

If your payment is not received by the due date indicated in your transfer package, you will only be credited with pensionable service based on the funds received from your previous pension plan.

Complete the transfer Once the payment(s) have been processed, you will be notified that the transfer is complete. You will receive an income tax receipt for any lump sum cash payments.
For more information

If you have any questions or need additional information, please contact UPP’s Pension Services team.

The Plan’s contribution rates are set by UPP’s Joint Sponsors. As a UPP member, you currently contribute:

University Pension Plan member required contribution (matched by employer)

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 2021, YMPE is $61,600.

Different contribution rules apply during certain types of leaves of absence and special programs.

IMPORTANT: Under the UPP, your earnings for contribution formula purposes will be capped at $181,700 (2021) 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

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.

University Pension Plan annual pension benefit calculation

Your annual pension benefit, payable at your Normal Retirement Date, based on: your best average earnings* up to the average YMPE** multiplied by 1.6% plus your best average earnings above the average YMPE multiplied by 2%, the total of which is multiplied by your UPP pensionable service *an average of your highest 48 months of pensionable earnings as a member, limited to the amount that would produce the Income Tax Act (ITA) maximum lifetime annual pension ** average of the YMPE established by the federal government in the last 48 months before you retire.

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.

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.

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.

You can retire with an early reduced pension as early as the end of the month in which you turn 55. Your pension will be reduced by 5% for each year (prorated for partial years) that you are under age 65.

You can postpone your retirement until November 30th of the year in which you reach age 71.

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.

There may be times when your career or life choices alter your earnings or hours worked, which could affect your pension benefits. UPP offers many ways to ensure you continue building benefits and maximize your pension along the way.

During an employer-approved leave of absence, you will remain a member of UPP, but you will only earn pensionable service for that period if contributions are made. The chart below shows the most common type of leaves and how contributions can be maintained.

Please contact your university pension administration team to learn about other leaves of absence and how they might impact your pension.

If you leave for another UPP employer within 12 months of the date your employment ended, and you didn’t transfer any of your pension assets in your departure, your contributions will simply begin again, your memberships will combine, and your pension will be recalculated when you retire or leave for a non-UPP employer.

If you leave your job with a UPP employer, you will need to decide what to do with your UPP pension. You will receive a statement of options*, as summarized below:

For members under age 55, you can:

  • leave your benefits in the Plan until you become eligible to retire (the default option) or,
  • transfer the commuted value of your UPP pension to a registered retirement vehicle (such as an RRSP) or another pension plan or purchase an annuity through an insurance company. This is a time-limited, final settlement of your UPP pension. If you rejoin UPP at a future date, you cannot put the money back into the plan and your previous service and earnings will not be used to determine your eligibility to retire or the amount of pension you will receive.

For members aged 55 or older, you can:

  • leave your benefits in the Plan until age 65 or,
  • take an immediate pension.

You should always seek independent professional financial advice when making decisions about your UPP pension.

*Please note that if you happen to rejoin UPP before receiving your termination options package, re-entering the Plan becomes your ‘default’ selection and a lump-sum transfer is no longer available.

There may be impacts on your pension if you return to work for a participating UPP employer after you start collecting a pension.

If you return to work for a participating UPP employer (in an eligible employment class) on a continuous full-time basis, your pension payments will stop and you will become a contributing member of UPP. You’ll build additional benefits and your pension will be recalculated when you retire again.

If you return to work for a participating UPP employer (in an eligible employment class) on a basis other than continuous full-time, you will have the option to continue receiving a pension, or to stop your pension payments and become a contributing member of UPP.

If you decide to start contributing to UPP again, you will build additional benefits and your pension will be recalculated when you retire again. If not, you will continue collecting your pension and working, but will not accrue any further service under UPP.

If you return to work for a non-UPP employer, there is no impact to your pension.

Survivor benefits are an important feature of the Plan, to help provide for your loved ones when you pass away, whether before or after retirement. Completing the Beneficiary Designation Form when you join the Plan helps ensure the right benefits are provided to the right people. The form is available from your university pension administration team.

If you have a spouse, as defined by the Plan, that person is automatically entitled to your death benefits unless they sign a waiver.

If you do not have a spouse or your spouse waived their rights to survivor benefits, you can designate a beneficiary to be next in line for death benefits. If you do not have a spouse or a beneficiary, this money will be paid to your estate.

Please see UPP’s Member Handbook for more information, or speak to your trusted university pension administration team.

Want to know more? See our up-to-date frequently asked questions.

We hope you’ll get to know your UPP – a pension plan whose time has come, and one that will make you proud. For more information about UPP, contact us.