To mark the Day, we’ve complied a summary of UPP’s plan features, which were carefully designed to ensure UPP members can enjoy peace of mind in retirement.
A key feature of any defined benefit pension plan is secure and predictable retirement income for life, which takes the guesswork out of retirement planning. This is determined by a formula, usually based on your salary and the number of years you worked.
UPP’s formula uses what’s called “best average earnings”, or the average of your highest non-consecutive 48 months of pensionable earnings as a member, up to the maximum pension limit under the Income Tax Act. This is an important difference in determining your pension amount. Using the average of your best months of earnings instead of a career average means you’re using a higher income amount as an input into the pension benefit formula.
When it comes to participating employers, there are two types of pension plans: single-employer and multi-employer. A single employer pension plan (SEPP) is one in which a single employer participates in a pension plan – either for all employees, or for certain classes of employees. A multi-employer pension plan (MEPP) is one in which two or more distinct employers participate and contribute, usually in a similar field. This allows members to maintain their pension when moving to a new employer who is also part of the same pension plan.
UPP is the first multiemployer defined benefit plan in the university sector. That means that plan members in eligible employment classes can seamlessly move between UPP participating employers and combine part-time service at multiple UPP participating employers – without losing any years of service.
This flexibility extends to the age of retirement under UPP. UPP offers early unreduced retirement as early as age 60 if the member’s age and years of eligible service equals at least 80 points. There is no cap on the years of eligible service. UPP members can continue contributing and growing their pensions until until age 71 (Canada’s maximum pensionable age).
In Ontario, pension funds are invested and managed by investment professionals who operate under the fiduciary duty to always act in the best interests of plan beneficiaries. This is a legal standard set out under the Pension Benefits Act (PBA).
This duty is core to UPP’s mission: to fulfill the pension promise to members, now and in the future. Our team of global investment experts has over 170 years of experience across various aspects of investing including portfolio management, actuarial analysis, responsible investing, and private markets.
UPP’s size and growing scale allows us to manage select investment strategies internally, bringing cost savings and greater transparency and control. It also provides access to different types of investment opportunities, particularly in private markets.
Indexation, or cost of living adjustments, are an important benefit offered by some defined benefit plans, including UPP. It is a feature designed to increase the amount of your monthly pension in pay through a cost-of-living adjustment based on the increase in the Canadian Consumer Price Index (CPI). In other words, your pension is protected against rising costs of goods and services.
See how inflation protection was applied to UPP pensions in pay in 2023.
Many defined benefit pensions, including UPP, provide options for coverage for loved ones when you pass away after retirement in the form of survivor benefits.
Under UPP, if you have a spouse, the UPP Plan offers 50%, 60%, 80% or 100% spousal pension options—all with a 10-year guarantee option. That means if you pass away before 120 monthly payments have been made to you, your surviving spouse is entitled to your full pension payments for the remainder of the 120-month guarantee period, and then reduces to the 50%, 60%, 80% or 100% spousal pension for the remainder of their lifetime.
If you don’t have spouse at retirement, you can select either a 10- or 15-year guarantee, where the balance of payments will be made to your beneficiary or estate.
These selections are made before you start receiving your pension. Depending on your selection, your retirement pension will be permanently adjusted to provide for the higher forms of survivor benefits. Adjustments are based on actuarial assumptions and other factors, including the age of your spouse (if applicable). Assumptions are subject to change.
More information about UPP’s survivor benefits can be found in our Member Handbook.
Please contact your university pension administration team, or UPP’s Member Services via email: email@example.com
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