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HOOPP

Leaving your HOOPP employer

As a HOOPP member, you are entitled to a pension when you retire. If you leave your HOOPP employer before it is time to start your pension, you can simply remain a member of the Plan, where your pension will remain safe and secure until you’re ready to retire.

Are you considering moving to a new employer? We have good news for you. 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. 

When thinking about a new job, think about retirement, too. If you decide it’s time for a change, it may make sense for you to look for a new employer that offers HOOPP. You’ll keep all the benefits your pension offers and continue to grow your pension and increase your retirement security. Before you make any decisions, view our list of HOOPP employers.

Watch our video which highlights the benefits of staying a HOOPP member.

Options when leaving your employer

Your options will depend on your age, the value of your benefit and what kind of pension plan, if any, your new employer offers. Please note that if you are age 55 or older and ending your employment at all HOOPP employers, you have the option to start receiving your monthly pension immediately.

You have two main options when leaving your HOOPP employer: stay a HOOPP member or take your pension out of the Plan.

Option 1: Staying a HOOPP member (deferring your pension)

There are many great reasons to consider keeping your pension with HOOPP. As a member, you are part of one of the largest and most respected defined benefit pension plans in Canada. Keeping your pension with HOOPP means it will remain secure in the Plan, and you can collect it when you reach retirement age. HOOPP gives you the flexibility to start your lifetime pension as early as age 55. The choice is yours. Learn more about your retirement options.

The benefits of keeping your pension with HOOPP

Being a HOOPP member is valuable for a number of reasons that would be hard to find elsewhere:

  • You can continue to grow your pension if you stay in healthcare and move to another HOOPP employer.
    If you’re considering staying in healthcare, you may even be able to combine the service that you earned during your membership at your previous HOOPP employer with the service that you earn at your new job. Learn more about how your pension can move with you.

  • Your pension payments can grow as the cost of living goes up.
    Learn more about our valuable inflation protection feature and how it can help your pension keep up with rising prices.

  • Your pension offers survivor benefits to provide additional security for you and your family.
    The benefit is offered at no additional cost to you and is designed to help protect your loved ones if you pass away before or after retirement. Learn more about planning for your loved ones.

  • You’ll have control over when you start your pension.
    With the ability to retire as early as age 55, you’ll know exactly what you’ll receive every month with a predictable retirement income. Learn about early retirement.

  • You will never outlive your pension.
    It will be paid for the rest of your life, even if you live to be over 100 years old. Plus, your pension is based on a formula that uses your earnings and years of service. With HOOPP, your retirement security is not reliant on investment returns. This means that you will have predictable income in retirement and you won’t have to make investment decisions or worry about market fluctuations. Learn about how your pension works.

Option 2: Taking your pension out of HOOPP

Transferring your pension out of HOOPP is a big decision that you need to consider carefully. Once you make the transfer, you will no longer be eligible to receive a lifetime pension from HOOPP. Time limits may also apply. Here are some possible options:

Transfer to a different defined benefit (DB) pension plan.

Transfer to a different defined benefit (DB) pension plan.

If you are under age 65, you may be able to transfer the value of your HOOPP benefit to your new employer’s DB pension plan if they offer one. We will work with you, if needed, and coordinate with the administrator of your new employer’s plan to make a tax-free transfer, where eligible.

Transfer to a locked-in retirement account or defined contribution (DC) pension plan.

Transfer to a locked-in retirement account or defined contribution (DC) pension plan.

If you are under age 55, you can transfer the value of your pension to a locked-in retirement account (LIRA) or to your new employer’s DC pension plan, if they offer one. If you are considering a LIRA, keep in mind that those accounts are only for pension transfers and can’t accept new contributions. When you are between the ages of 55 and 71, you must convert your LIRA to a life income fund (LIF) and begin making taxable withdrawals within certain minimums and maximums.

Tax information for transfers to a LIRA or a DC plan

The Income Tax Act sets a limit on how much of your commuted value can be transferred on a tax-deferred basis. Here’s what you need to know:

  • Amounts up to this limit may be rolled over into a LIRA or a DC plan. This transfer will not be reported as income on a tax slip and will not use RRSP contribution room.
  • A portion of your commuted value may be over this limit. This amount is considered taxable income. It will be subject to mandatory withholding tax, unless you instruct HOOPP to pay it directly to your financial institution as an eligible RRSP contribution. Please note: this option is only available if you have enough contribution room. 

HOOPP will issue a tax slip for the amount that is over the limit described above. This amount must be reported as income in the year it is paid. If you are able to contribute these funds to your RRSP, your financial institution will provide you with a tax receipt.

For HOOPP to pay this amount to your RRSP, you must confirm that you have enough contribution room. You are responsible for ensuring you have enough room; otherwise, you may be subject to tax penalties for overcontributing.

The amounts that apply to your pension and your transfer options will be shown on the personalized statement you receive from HOOPP. The commuted value is calculated for a set period and is based on certain factors and assumptions, such as interest rates. As a result, it may go up or down over time. 

Purchase a deferred annuity from a licensed insurance provider.

Purchase a deferred annuity from a licensed insurance provider.

Annuities are insurance products that are intended to provide a regular income stream in retirement.

Remember, not all pension plans are designed equally. While you may have the opportunity to join another pension plan, HOOPP offers a hard-to-match set of benefits that contribute directly to your retirement security.

If you are being advised to take your hard-earned pension out of HOOPP, you need to be aware of all the risks, so you can make the right decision for your personal situation.

The risks of taking your pension out of HOOPP

While taking your pension out of HOOPP to a LIRA or DC plan in the form of a commuted value (CV) lump sum is an option, it’s not a decision you should ever make lightly. There are a lot of important things for you to consider.

Weighing your options

Should you keep your pension with HOOPP or take it out of the Plan? This table summarizes the key differences between staying with HOOPP and giving up your benefit by transferring your CV to a LIRA or DC plan. 

 Keeping your pension in HOOPPGiving up your HOOPP pension
How will your pension be impacted by taxes?

Your monthly pension is taxable and your taxes may be reduced using tax credits and pension income splitting with your spouse. 

 

 

 

 

You’ll pay more tax than expected. A portion of your lump-sum payment may be made in cash and therefore subject to taxes. HOOPP is required to deduct up to 30% tax when you receive the payment. This cash portion is also reported as income in the year you receive it, which means that you may end up owing even more taxes at year-end based on your combined income. Ultimately, taxes can significantly reduce the net amount that you receive, meaning you could end up having less money to invest than expected.

Who is responsible for investing the money?HOOPP’s experienced investment team manages the Fund on behalf of over 435,000 members in order to provide them with a secure lifetime pension. With investment professionals focused on retirement security, you don’t have to worry about making complicated investment decisions that can impact your future.You will most likely be responsible for your own investment decisions and bear the risks of market volatility and underperformance to generate enough of a return to equal your guaranteed lifetime pension at HOOPP. If you don’t have enough money to retire when you want to, you may be forced to continue working longer than planned. 
Will you have enough to last through retirement?

Your pension provides you with secure and predictable retirement income, paid for life. You will never outlive your HOOPP pension, and your pension also comes with valuable features.

 

With do-it-yourself investing, or investing through an advisor, you run the risk outliving your savings due to unexpected expenses in retirement. Depending on the investment choices you make and how the markets perform, you be forced to spend less in retirement or work longer.
Will your retirement income come with other valuable features?At no extra cost, your HOOPP pension comes with many valuable features such as inflation protection, early retirement options and a lifetime pension for your surviving spouse, which is unique to DB plans. When you leave HOOPP, you’ll lose valuable features such as survivor benefits and inflation protection. These can be very difficult and costly to arrange through a financial services provider.
Will you have coverage from rising prices?With HOOPP, your pension will continue to grow each year in retirement with any Board-approved cost of living adjustment (COLA).This is unlikely, as it’s difficult and costly to obtain or achieve.
Will your loved ones be protected?Your HOOPP pension includes generous benefits for your spouse or, where applicable, your beneficiaries.Your ability to provide a survivor benefit to your spouse or loved ones will depend on the retirement income strategy you choose and whether there’s any money left.

As the table illustrates, replacing the security, stability and predictability of your HOOPP pension can be risky and stressful and may not even be possible. Your HOOPP pension removes all of this uncertainty and gives you peace of mind knowing it will be there for you in retirement.

Example: Meet HOOPP member Joanne

HOOPP member Joanne

Joanne has decided to make a career change and is moving to a non-HOOPP employer. 

Age: 45 
Left HOOPP employer: May 31, 2022
Years of service: 12 
Average salary: $60,000 
Goal: To retire at age 60

Learn more about Joanne's decision

Small pension options

If you have participated in the Plan for a short period of time, your pension may be considered a small amount under rules set out by the Pension Benefits Act. When your HOOPP pension fits this criteria, you have the option to take the value of your pension as a lump-sum amount, less applicable taxes, rather than receive a monthly payment after you’ve retired.

In many cases, having a small pension means the amount you receive in your monthly pension payments will be low, so it may not be in your best interest to collect your pension monthly for life.

When should you consider taking the value of your pension as a lump sum?

It’s worth considering where you’re going in your career to help you decide what’s best for your personal circumstances.

Leaving healthcare?

Leaving healthcare?

If you are leaving healthcare and are not planning to return to work for a HOOPP employer, you will not have the opportunity to grow your pension further. You may want to consider taking your pension as a lump-sum cash payment, less applicable taxes, or transferring the value of your pension to a registered retirement savings plan (RRSP).

Staying in healthcare?

Staying in healthcare?

If you are planning to stay in healthcare and might return to work for a HOOPP employer, you will have the opportunity to continue to grow your pension while you work. Nothing needs to change. You can keep your pension in the Plan and remain a HOOPP member. Once you start working at another HOOPP employer, you can continue to grow your pension.

Please be sure to let us know if you choose to stay a member of HOOPP by submitting your termination benefit election on time.

We're here to help!

We are committed to providing you with the information you need to make the right decision for your personal situation, whether you choose to change employers, or leave healthcare or the workforce. If you are thinking about taking your benefit out of HOOPP, please contact us first. Our pension experts can explain your options fully, help you make an informed decision and provide you with peace of mind.

Please contact our Member Services team if you have questions.

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.