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HOOPP

How Your Pension Works

How Your Pension Works

How Your Pension Works

Members Plan Features How Your Pension Works

We make it easy for you to build a secure financial future. A defined benefit pension plan (DB) like HOOPP provides a monthly income that begins in retirement and is paid for the rest of your life. The amount you receive is based on a formula that takes into account your earnings, the number of years you have been contributing to the Plan and your age when you start your pension. This means that when you retire, your HOOPP pension will be worth more than you contributed. Plus, you may also benefit from Plan features such as early retirement options, survivor benefits and inflation protection – at no additional cost to you.

This page provides an overview of how the Plan works, including what you and your employer contribute, and how your HOOPP pension is calculated.

To get your personalized pension details, please sign in to HOOPP Connect.

What you contribute

Your employer will calculate your contributions each pay period and deduct them directly from your pay. The amount you contribute is based on your earnings and the Plan’s contribution rates.

What are your pensionable earnings?

What are your pensionable earnings?

In general, whether you are full time or part time, you contribute to HOOPP on the pensionable earnings you receive from your HOOPP employer up to the full-time equivalent hours for your position.

Pensionable earnings are the regular, straight time portion of wages, salary and other amounts that you are paid in relation to the hours, weeks, or other specific periods of time that you’re employed, and that form a regular and integral part of your earnings from your employer up to the full-time hours for your position.

Your pensionable earnings may be less than the actual employment earnings you receive from your employer. Some examples of pensionable earnings include:

  • your regular wages
  • the regular pay portion (or straight time pay), up to the full-time hours for your position that you are paid for:
    • working overtime, on a weekend, during a statutory holiday, for an unscheduled extra shift or where you are called in while on “stand-by”
    • time off in lieu of overtime (banked hours)
    • paid vacation
  • a regularly occurring bonus that represents a fundamental and recurring component of an employer’s long-term compensation program.

If you’re an incorporated physician, your pensionable earnings, expressed on an annualized basis, are subject to your upper earnings limit and lower earnings limit.

As a member of the Plan, you currently contribute 6.9% of your earnings up to the year’s maximum pensionable earnings (YMPE) and 9.2% of your earnings above the YMPE. 

Plus, you can feel secure knowing your employer supports your retirement security as HOOPP employers also fund the Plan. For every dollar that you contribute off your pay, your employer contributes $1.26.

You get a lot of value for your dollar

HOOPP sets member and employer contribution rates annually. Compared to some of our larger peer plans in Ontario, HOOPP’s rates are among the lowest and have not changed since 2004.

The following section is intended to help you understand your contributions, and the amount you will receive in retirement. To assist in your understanding of this information, please refer to our glossary of pension-related terms.

All member contributions are invested in the HOOPP Fund, which is managed by an in-house team of investment professionals.

For every pension dollar you receive, 80 cents comes from investment returns and only 20 cents comes from member and employer contributions.

HOOPP's contribution formula explained

If you work part time  

If you work less than full-time hours in your position, your contributions will be based on what you would have earned working full-time hours. Your contributions will then be adjusted according to the percentage of full-time hours you work.

To help you see what this would look like, we’ve provided an example of part-time contributions below.

Example of full-time vs part-time contributions

HYPW-Sally-example

Meet Mariella

Let’s meet Mariella and see how her contributions would change if she worked full time vs. part time.

Read more

What you put in vs what you get out

The pension you receive over a span of 20+ years is much more than your total contributions. In fact, as we see in the graph below, most members receive their contributions back in the form of pension payments within three to four years into retirement. In addition to your lifetime pension, you may also benefit from features such as survivor benefits and inflation protection.** When these benefits are factored in, the value of your pension increases.

**HOOPP may provide inflation protection through a cost of living adjustment (COLA). Learn more about HOOPP's inflation protection.

You get more than you put in.
Contributions and your taxes

At tax season, your pension contributions are reported on your T4 slip that you receive from your employer. Did you know that every dollar you contribute towards your HOOPP pension immediately reduces your taxable income? Since your pension contributions are made through automatic payroll deductions, you don’t pay tax on that portion of your salary.

How your pension is calculated

The monthly lifetime pension you will receive in retirement is determined using a formula that is based on your earnings and how much service you have built in the Plan.

To calculate your lifetime pension, we use:

For each year of contributory service, you receive 1.5% of your average annualized earnings up to the average YMPE, plus 2% of your average annualized earnings above the average YMPE.

HOOPP pension formula*

*If you were eligible for HOOPP's past service benefit improvements effective January 1, 2018, April 1, 2021, January 1, 2023 and/or July 1, 2024, you may receive 1.75%, 1.9% or 2% of your average earnings up to the average YMPE (instead of 1.5%) for all or a portion of your contributory service before 2024. This means that eligible members will receive a larger lifetime pension for certain past service than they would have prior to the improvements. A corresponding adjustment to the bridge benefit applies for those who retire early. Learn more about the recent benefit improvements.

If you work part time

If you work part-time, we annualize your earnings to calculate your pension. That means we use the amount that you would have earned working full-time in your position when we determine your best five consecutive years of earnings.

Let's use Claire as an example:  

HYPW-Claire-example

Meet Claire

This example shows what Claire’s lifetime pension and bridge benefit would be using a full-time and part-time scenario. You’ll see that her total pension payments will exceed the amount she contributed during her career.

Read more

Early retirement and bridge benefits 

As a HOOPP member, you have the flexibility to start receiving your lifetime pension as early as age 55. An early retirement adjustment may apply based on your age and completed years of eligibility service. You'll also receive a temporary bridge benefit, along with your lifetime pension. Learn more about when you can retire.

Learn more about when you can retire.

Check how much your pension will be

With the Pension Estimator you can get a personalized estimate of what your future pension could look like at key milestone dates, and how it can change based on different factors and possibilities, such as:

  • retiring early or later
  • changing your future work schedule (e.g. from full-time to part-time or vice versa)
  • any future salary increases.

Sign in or register for HOOPP Connect today!

Other benefits of being a HOOPP member

You get more than a lifetime pension. With HOOPP, you may also benefit from additional features that would be hard to find elsewhere, like survivor benefits for your loved ones, inflation protection and more. Plus, HOOPP is a multi-employer pension plan, which means you can continue to grow your pension at any of the more than 630 healthcare employers across Ontario that currently offer HOOPP.

Learn more about how your Plan features provide added benefits.

 

Not a member yet?
Learn more and see the difference that the HOOPP pension makes.

This document provides a simplified overview of HOOPP's benefits based on the terms of the HOOPP Plan Text at the time of publication. From time to time, HOOPP may amend the HOOPP Plan Text. In cases where the information provided in this document differs from that contained in the HOOPP Plan Text, the HOOPP Plan Text will govern. More details, including the full HOOPP Plan Text and a complete description of the Plan and its benefits, can be found on hoopp.com.