University Pension Plan was created with the vision of a strong sector-wide defined benefit pension plan to guarantee sustainable pensions to members – now and for generations to come. The investment earnings of the plan, as well as the contributions made by you and your employer, are what fund your pension. Learn more about the factors that go into calculating what you and your employer contribute, and the pension you’ll receive.
The following answers summarize the main features of your University Pension Plan Ontario (UPP) in simple terms. A complete description is contained in the UPP Plan Text, available through your employer or upon request to UPP via email ([email protected]). Every effort has been made to provide an accurate summary. However, if there are any differences between the information given here and the Plan Text, the Plan Text applies.
The best place to start is the UPP Member Handbook, which outlines key information for each stage of your UPP pension journey. If you have questions specific to your individual pension, please contact your university pension services team listed below.
University of Toronto
Tel: 1 (888) 852-2559
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:
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:
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:
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:
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
|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.|
A transfer in election package will be sent to you to review the total cost and your payment options. The package will include:
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.
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.
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:
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 2023, YMPE is $66,600.
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 $196,200 (2023) 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.
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.
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.
In the meantime, the universities listed below provide pension calculators on their member portals. You can use your university’s member portal anytime to estimate your future pension, using your own pension data and retirement dates.
University of Toronto
Tel: 1 (888) 852-2559
If your employer is not listed above, you can request a projection of your future pension from UPP’s Pension Services team via email – [email protected]
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.
If your employer provides a member portal, you can log in and use the pension calculator to estimate your future pension, using your own pension data and retirement dates.
Close to retirement? You can request a personalized pension estimate, which will give you a snapshot of what you can expect to receive in retirement based on your expected plans.
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. Your pension will be reduced by 5% for each year (prorated for partial years) that you are under age 65. Your pension will be reduced by 5% for each year (prorated for partial years) that you are under age 65. 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.
You can read more about the path to retirement in the Member Handbook.
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.
You can read more about inflation protection in the Member Handbook.
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.
|Type of Leave||Your Contributions||Your Employer’s Contributions|
|Statutory (Ex: parental leave)||Optional – you decide if you want to continue your contributions or not||Your contributions are matched by your employer (as applicable)|
|Unpaid||Optional – you decide if you want to cover your and your employer’s contribution amounts||Your employer does not contribute|
|Paid||Required – contributions continue without interruption||Your contributions are matched by your employer|
|Research & Study||Required – contributions continue without interruption||Your contributions are matched by your employer|
|Long-term Disability||You do not contribute||Contributions will be made by your employer if you are (or would be) eligible for long-term disability benefits|
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:
For members aged 55 or older, you can:
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.
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.
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.
If you leave your employment with an employer who participates in UPP and move to an employer who does not participate in UPP, neither you nor your new employer can make contributions to UPP.
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.
If you pass away before retirement, your beneficiary will receive the commuted value of your pension. The commuted value is the lump sum value of your pension that would be payable at retirement calculated in accordance with Ontario pension standards legislation.
If you pass away after retirement,, UPP’s normal form of pension for a member without a spouse is a lifetime pension for you with a 10-year guarantee. This means if you retire and pass away before receiving a total of 120 monthly payments, the balance of payments will be paid to your beneficiary.
If you have more than one beneficiary, the benefit will be split in percentage shares you designate. If you do not have a beneficiary, the benefit will be paid to your estate.
The commuted value is the total estimated value in today’s dollars of the lifetime pension you have earned and would be payable at retirement. It is an actuarial calculation prescribed by pension standards legislation that involves many factors, including your age, your assumed retirement age, mortality rates and interest rates.
Because the commuted value is a current estimate of a future value, the lump sum you may receive based on a commuted value may be greater or less than the actual pension payments that you would have received if you had elected to receive a pension from the Plan.
In Ontario, all members of a registered pension plan (like UPP) are vested immediately upon joining the plan.
No, the UPP does not allow for additional voluntary contributions.
You can only use funds from a registered retirement account, such as an RRSP, to pay for a transfer in “shortfall”. A shortfall occurs if you transfer in service from a prior employer’s pension plan and that plan does not have sufficient funds to satisfy the UPP cost.
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