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HOOPP

Time Away From Work

Time Away From Work

Time Away From Work

Members Life Changes Time Away From Work

There are times when you may need to be away from work, perhaps because you’re having a baby, or you need to tend to a personal emergency. 

In many cases where your employer has approved your leave from work, you can continue to build your HOOPP pension by making contributions for your leave of absence. In fact, making contributions will help you build your pension over the long run.

Types of leaves

Statutory leaves

As outlined in the Ontario Employment Standards Act (ESA), you can choose to make contributions for the following types of leaves:

  • Pregnancy leave
  • Parental leave
  • Family medical leave
  • Emergency leave
  • Organ donor leave
  • Family caregiver leave
  • Critically ill child care leave
  • Crime-related child death and disappearance leave

Non-statutory leaves

Your employer may grant other types of leaves, for example, for travel or education. If your employer approves a leave that lasts less than 31 days, contributions are mandatory for you and your employer.

If your employer approves a leave that is 31 days or more, your employer decides whether you can make contributions. If you are permitted to contribute and do so, your employer must contribute as well.

Health leaves

If you are unable to work due to physical or mental illness, or injury, your employer may place you on a health leave. This is handled differently from other types of leaves. Learn more about how you can contribute during the first 15 weeks of a health leave.

Special situations

  • Strikes or lockouts
    You can choose whether to contribute for a period of strike or lockout.
  • Temporary period of reduced earnings
    If your employer permits, you can choose to “top up” your contributions during a temporary period of reduced earnings, as long as you have been with the same employer for at least three months. Examples of a temporary period of reduced earnings include: participating in a temporary job-sharing program or working fewer hours each week for a temporary period of time.
  • Temporary layoffs
    For layoffs less than 31 days, you and your employer continue to make contributions. For layoffs longer than 30 days, your employer determines if contributions continue.
  • Pre-paid leave plans
    For example, a four-for-five arrangement allows employees to receive 80% of their earnings for four years while “banking” the remaining 20% of their earnings to take as income during the fifth year which is taken as a year off.
Note:

For the first four years, contributions are based on 100% of your earnings, even though you are only receiving 80% of their normal earnings during this time. This means you will accrue full contributory service during the first four years, just as you would if you were not taking a leave in the fifth year. Your employer will also make contributions based on your full earnings. 

There are two ways in which you can build pension service for the fifth year, while you are away from work: you can make contributions or you can buy back this period. Contributions are based on 100% of what you would have earned had you worked your usual hours.

  • Contribution limits
    According to Canadian tax rules, there are restrictions on the total contributory service you can build while away from work on a leave from a HOOPP employer. This applies to all statutory and non-statutory leaves, strikes or lockouts, temporary period of reduced earnings and pre-paid leave plans.

    Note that these restrictions do not apply to health leaves or any eligible periods that you purchase on a past service basis.

Unapproved absence

If you are absent from work that is not an employer-approved leave – for example you are placed on a suspension or do not have permission to take time off work, and your absence is not due to other circumstances as noted above, contributions are not permitted for this period. As a result, you will not receive contributory service for this period and will not be eligible to buy back this period.

If you are away from work for other reasons, contact Member Services or your employer to determine if you can elect to continue your contributions.

How to make contributions for your leave of absence

If you decide to make contributions during a statutory leave or are permitted to do so during a non-statutory leave, there are two ways you can contribute: 

  • Contribute while you’re away, as though you were working, or
  • Pay the lump sum of your contributions no later than six months from the end of your leave 

Speak with your employer to make arrangements regarding your contributions.

If you work full-time

 Your contributions are based on your full pre-leave earnings, though you can contribute less. The more you contribute, the more service and earnings you’re building for your pension in retirement.

If you work part-time

 Your contributions for the leave period will be based on your average hours worked prior to the leave.

It’s in your best interest to make these contributions as soon as possible. If you delay making contributions following the end of your leave, HOOPP may be required to report a Past Service Pension Adjustment (PSPA) to the Canada Revenue Agency (CRA). The CRA will reduce your available RRSP contribution room by the amount of the PSPA and must certify the PSPA before your leave period can be recognized by HOOPP. If CRA does not certify the PSPA, please contact our Member Services team to discuss your options.

The benefits of contributing

Contributing for a leave of absence prevents “a gap” in your service, and ensures that you will have more years of contributory and eligibility service at retirement. That can make a big difference in your pension benefit when it’s time to retire.

Here’s a simple example:


The benefits of contributing: example

Lucia and Michelle are the same age and were hired at the same hospital on the same day. They both earn an average of $80,000 per year. Lucia and Michelle both decide to retire on January 1, 2025. Both have two children, and both took two eighteen month pregnancy/parental leaves. Lucia made contributions for both of her leaves, but Michelle did not.

That means Lucia has 17 years of contributory and eligibility service and Michelle has 14 years when they each retire at age 55.

Lucia's monthly HOOPP pension at retirement



Michelle's monthly HOOPP pension at retirement


By contributing for these leaves, Lucia will receive on average $503 more per month in retirement and a total of $150,900 more than Michelle between age 55 and age 80. Keep in mind, this example doesn’t factor in any inflation protection that may be paid in the future.

Making contributions during her leave helped Lucia increase her pension by adding contributory service. Because Lucia’s contributory leave periods were subject to a past service benefit improvement approved by HOOPP, her pension grew even more. Also, crossing an eligibility service milestone of 15 years helped minimize reductions in her pension for her early retirement. Learn more about eligibility service milestones.

When it’s time to retire, Lucia is eligible for total HOOPP benefits of $1,830 per month, while Michelle would receive $1,315 per month, which includes a bridge benefit until age 65. That’s a difference of $515 per month or $6,180 per year!

See what a difference this makes when Lucia and Michelle are 80 years old, in the following tab.

The benefits of contributing: example

By her 80th birthday, Lucia will have received: By her 80th birthday, Michelle will have received
$525,000 in lifetime pension payments $376,500 in lifetime pension benefits
$9,600 in bridge benefits until age 65 $7,200 in bridge benefits until age 65
Total lifetime HOOPP benefits: $534,600 Total lifetime HOOPP benefits: $383,700

Lucia and Michelle were developed as examples by HOOPP for illustrative purposes only. In these examples, we have assumed that Lucia and Michelle have qualified for past service benefit improvements, including the improvement effective on July 1, 2024. For simplicity, inflation protection has not been factored into this example. All amounts have been rounded to the nearest dollar.

  • Lucia and Michelle - Age 55

    The benefits of contributing: example

    Lucia and Michelle are the same age and were hired at the same hospital on the same day. They both earn an average of $80,000 per year. Lucia and Michelle both decide to retire on January 1, 2025. Both have two children, and both took two eighteen month pregnancy/parental leaves. Lucia made contributions for both of her leaves, but Michelle did not.

    That means Lucia has 17 years of contributory and eligibility service and Michelle has 14 years when they each retire at age 55.

    Lucia's monthly HOOPP pension at retirement



    Michelle's monthly HOOPP pension at retirement


    By contributing for these leaves, Lucia will receive on average $503 more per month in retirement and a total of $150,900 more than Michelle between age 55 and age 80. Keep in mind, this example doesn’t factor in any inflation protection that may be paid in the future.

    Making contributions during her leave helped Lucia increase her pension by adding contributory service. Because Lucia’s contributory leave periods were subject to a past service benefit improvement approved by HOOPP, her pension grew even more. Also, crossing an eligibility service milestone of 15 years helped minimize reductions in her pension for her early retirement. Learn more about eligibility service milestones.

    When it’s time to retire, Lucia is eligible for total HOOPP benefits of $1,830 per month, while Michelle would receive $1,315 per month, which includes a bridge benefit until age 65. That’s a difference of $515 per month or $6,180 per year!

    See what a difference this makes when Lucia and Michelle are 80 years old, in the following tab.

  • Lucia and Michelle - Age 80

    The benefits of contributing: example

    By her 80th birthday, Lucia will have received: By her 80th birthday, Michelle will have received
    $525,000 in lifetime pension payments $376,500 in lifetime pension benefits
    $9,600 in bridge benefits until age 65 $7,200 in bridge benefits until age 65
    Total lifetime HOOPP benefits: $534,600 Total lifetime HOOPP benefits: $383,700

    Lucia and Michelle were developed as examples by HOOPP for illustrative purposes only. In these examples, we have assumed that Lucia and Michelle have qualified for past service benefit improvements, including the improvement effective on July 1, 2024. For simplicity, inflation protection has not been factored into this example. All amounts have been rounded to the nearest dollar.

If you do not contribute 

If you do not make contributions on an employer approved leave, you may still be able purchase the service at a later date by completing a buyback. Learn how buying back service can help you maximize your pension.

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.