The PSPP (the Plan) is a Defined Benefit Pension Plan that provides you with a lifetime of monthly payments upon retirement. This will be a valuable financial asset when you are ready to retire.
You are automatically enrolled in the Plan when you become permanently employed by a participating employer. You contribute to the Plan through regular payroll deductions, which are matched by your employer. Contributions to the Plan are mandatory if you are a permanent employee.
The Plan uses a formula to determine how much pension you will receive when you retire. The following components are used to calculate your PSPP benefit:
- your career average salary at date of termination;
- your total pensionable service at date of termination; and
- the rate at which your pension grows (ie. accrual rate) with each year of service
For more information, see the Plan Summary (PDF).
You contribute a percentage of your bi-weekly earnings to the Plan and that amount is matched by your employer each pay period.
The percentage of contributions is currently 8.09% of pensionable earnings up to the Year's Maximum Pensionable Earnings (YMPE) and 9.75% of pensionable earnings in excess of the YMPE.
The YMPE is an amount determined each year by the Canada Pension Plan. The YMPE for 2020 is $58,700.
Your bi-weekly contributions are listed on your pay advice, or Insite Portal, under 'Before-Tax Deductions.' If you are permanent and you do not see a PSPP contribution under this heading you should contact your payroll office immediately.
Your PSPP pension grows with your pensionable service. To keep you informed of this growth, an annual Pension Statement is mailed to your home each summer that lists your annual and total contributions. As such, it is important to keep the Pensions & Benefits office informed of any address changes.
While it is important to know how much you contribute to the Plan, your pension will be determined by your years of service and your average salary.
Did you contribute to a defined benefit pension plan with a previous employer? If so, you may be eligible to transfer those funds into the PSPP.
The PSPP has a number of transfer agreements with similar public sector pension plans across the country that allow you to consolidate your pension service and contributions into a single plan.
The following pension plans currently have Reciprocal Transfer Agreements with the PSPP:
- Education Sector Pension Plan (ESPP)
- Government on Canada Public Service Pension Plan
- Prince Edward Island Teachers’ Superannuation Fund (TSF)
- Holland College Pension Plan
- National Transfer Agreement Plans:
- Alberta Management Employees Pension Plan
- Alberta Public Service Pension Plan
- British Columbia Public Service Pension Plan
- Manitoba Civil Service Superannuation Fund
- New Brunswick Public Service Pension Plan
- Newfoundland Public Service Pension Plan
- Nova Scotia Public Service Superannuation Plan
- Ontario Public Service Pension Plan (OPSPP)
- Ontario Public Service Employees Union (OPSEU Pension Trust)
- Commission administrative des regimes de retraite et d’assurances
If your past employer is not listed, you may be eligible for a transfer under the PSPP's Standard One-Off Transfer Agreement.