Q: What does the Plan’s funded status mean? 

A: The funded status compares how much the Plan has in assets to how much it owes in projected pensions. When the funded status is 100% or higher, then the Plan is fully funded. The Plan’s funded status is determined by its assets and liabilities, as well as assumed rates of investment return and demographic assumptions on how our membership will age over the coming years. To see HOOPP’s most recent annual results, including our funded status, visit our Plan Performance page.

Q: Does the Plan’s funded status affect members? 

A: Your pension is based on a formula that takes into account your best five consecutive years of earnings and how long you’ve been contributing to the Plan. Once you retire, the pension you receive is paid to you from the HOOPP Fund, and you receive it for life.

In general, the Plan’s funded status reflects the long-term health of the Plan and our ability to keep the pension promise to you.

Q: Where is HOOPP investing my contributions?

A: The HOOPP Fund is composed of many of the same types of investments you would find in a mutual fund, like stocks, bonds, real estate, and fixed income. But we take a unique approach, known as liability driven investing (LDI). The difference is in our liability-driven investing (LDI) approach, which considers the Plan’s assets in relation to how much the Plan owes in pensions, now and into the future. HOOPP uses LDI to take the right amount of risk to deliver the returns needed to protect your pension. Using this approach, our portfolio is divided into two main components. The liability hedge portfolio invests in bonds and real estate, assets that match our liabilities and provide inflation protection and a steady cash flow. The return-seeking portfolio invests in assets and strategies that are expected to increase returns while balancing risk, including public and private equity.

Our LDI approach, combined with our long-term time horizon – we look more than 70 years in the future when investing contributions – ensures that we are able to deliver on our pension promise and pay member benefits regardless of the ups and downs in stock markets and the economy.

Q: How can I be sure that the Plan will provide me with a pension that starts in retirement and lasts the rest of my life?

A: Delivering on the pension promise is our mission at HOOPP. That means our commitment to being fully funded – so that all current and future pension payments are backed by assets in the HOOPP Fund – is our top priority.

This promise is reinforced by our funded status, which is closely monitored by our own internal governance as well as external regulators. Our funded status is determined by the Plan’s assets and liabilities, as well as assumed rates of investment return, and demographic assumptions. This gives us a view many years into the future so that, decades in advance, we can anticipate, and correct for, any potential shortfalls.

Q: I keep hearing that there will be so many retiring baby boomers in the years to come. Is HOOPP prepared for this?

A: For individual members, there is no impact from the retiring baby boomers. That’s because a member’s pension is based on a formula, which means we know in advance how much we need to pay our members in retirement. Over the course of a member’s employment, contributions from a member and their employer(s) are invested into the Fund which generates returns to help pay a member’s pension when they retire. 

The Plan’s funded status, which compares our assets to our liabilities, takes into account the Plan’s demographics (including those members who are baby boomers) and increased life expectancies. This coming wave of retirees is already reflected in our assumptions and our risk calculations.

As well, the Plan monitors demographic trends carefully with an annual analysis. It also conducts detailed demographic experience studies periodically to help ensure assumptions about future expectations remain relevant. In 2014 HOOPP adjusted the life expectancy assumption of Plan members according to new information from the Canadian Institute of Actuaries.

Q: If HOOPP increases its returns, does that mean members’ pension benefits increase?

A: The Fund’s overall return on investment does not directly impact how your pension is calculated, but it does contribute to the long-term health of the Plan. Positive returns strengthen our ability to keep our pension promise.

Your pension in retirement is based on a formula that takes into account your best five consecutive years of earnings and how long you’ve been contributing to the Plan.

The value of the benefit you will receive in retirement will likely amount to much more than your total contributions plus interest. Retired members typically get back their contributions plus interest about four or five years into retirement. That’s possible because about 80% of pension payments are generated from investment returns.

Check out your latest annual statement or sign into HOOPP Connect for an estimate of your retirement benefit.

Q: Can I transfer other money into HOOPP?

A: Because HOOPP is set up as a pension trust, we cannot accept monies that don’t correspond to an eligible period of pensionable service. The pension you receive from HOOPP is based on your employment, specifically your earnings and how long you’ve been contributing to the Plan. In some instances, cash or RRSP funds can be used to buy back service if there were periods of time where you were working for a HOOPP employer but not contributing to the Plan. These can include waiting periods, employer-approved leaves, or other eligible periods. For more information, visit our buying back service page, or call Member Services at 1-877-43(HOOPP) or 416-646-6445.