We have great news for HOOPP members: HOOPP benefits are improving!

We are proud to provide these significant benefit improvements. In addition to prior cost of living increases for our retired and deferred members, these measures add to our members’ financial security in retirement.

These changes take effect Jan. 1, 2018. The details of the three changes, including who they apply to, are set out below.

1) Increase to lifetime pension related to service before Jan. 1, 2018

Effective Jan. 1, 2018, if you are an active member (not retired or deferred), you will receive an increase to your pension for your years of service before 2018. Though all active members will benefit from this change, those who earn less than the year’s maximum pensionable earnings (YMPE), currently $55,300, will see the biggest gain in their pension on a percentage basis.

Currently

Your HOOPP pension is based on a formula that takes into account your earnings and years of service. For each year of contributory service, you receive 1.5% of your average earnings up to the average year’s maximum pensionable earnings (YMPE), plus 2% of your average earnings above the average YMPE.

What’s changing?

If you are an active member who has service before 2018, you will see a change in the way we calculate this portion of your pension. For each year of contributory service before 2018, you will receive 1.75% of your average earnings (instead of 1.5%) up to the average YMPE. The 2% rate on average earnings above the average YMPE will not change.

The change in the formula for past service is illustrated below.

This case study shows the impact of this improvement on a member’s pension:   

Before age 65

This change increases your lifetime pension. When you retire between the ages of 55 and 65, you receive both a bridge benefit and a lifetime pension. Before age 65, your total benefit from HOOPP will remain the same because your bridge benefit is being adjusted to reflect the increase in your lifetime pension.

Age 65 and after

The lifetime pension you will receive from HOOPP when you turn age 65 will be higher than it would have been prior to this change. You will receive this benefit for the rest of your life. 

What else do I need to know? 

As a result of this benefit improvement, you will receive a past service pension adjustment (PSPA) from HOOPP in 2018. A PSPA is used to show an increase in the value of your past pension service and it will decrease your available registered retirement savings plan (RRSP) contribution room.

2) Increase to lifetime pension resulting from a change in the way we determine the average YMPE

Currently

To calculate your pension, we currently use the average YMPE for the three calendar years immediately before your retirement. The YMPE is an amount set each year by the federal government based on the average wage in Canada.

What’s changing?

Starting Jan. 1, 2018, we will use the average YMPE for the five calendar years immediately before your retirement to calculate your pension. Since this average will be lower, more of your pension may be paid out at the 2% rate.

What else do I need to know?

This benefit applies to active members (not retired or deferred) on or after Jan. 1, 2018.

3) Increase to post-retirement survivor benefits, including a five-year guarantee period

This improvement consists of two parts:

• An increase to the minimum survivor benefit for your qualifying spouse when you pass away in retirement, and
• A new five-year guarantee from your retirement date for survivor benefits for your qualifying spouse.

Together, these changes provide added financial security for you and your loved ones.

This improvement applies to retired members, and active or deferred members who retire on or after Jan. 1, 2018.

Currently

When you pass away in retirement, your spouse at the time of your retirement is entitled to receive 60% of your monthly pension, not including a bridge benefit, for the rest of his or her life. When you retire, you may choose to increase this benefit to 80% or 100% of your monthly pension. These options will result in a reduction in your pension to reflect the additional benefit for your spouse.

What else do I need to know?

If you don’t have a spouse at retirement, payment of your monthly benefit is already guaranteed for a period of 15 years, the maximum benefit permitted under the Income Tax Act.

HOOPP is proud to make these significant improvements to our Plan so we can provide our members and their loved ones with added financial security in retirement.