When you joined HOOPP, you began building a solid foundation for your retirement that you’ll want to preserve, no matter where your career takes you. We do our best to make that easy.
Over a career, change is quite common. It could come from switching employers, choosing a new career path, or any number of other situations. While your working circumstances may change, the need to be ready for retirement doesn’t. That’s one of the reasons your HOOPP pension is so valuable. You can count on your pension to be an important part of your retirement security for life, and that doesn’t need to change.
Switching employers? Here’s how to protect your pension
Are you considering moving to a new employer? That’s okay. HOOPP is a multi-employer pension plan, which means you can continue to grow your pension at any of the more than 600 healthcare employers across Ontario that currently offer HOOPP. When thinking about a new job, think about retirement, too, like HOOPP member Alfred Lam. If you decide it’s time for a change, it makes sense for you to look for a new employer that offers HOOPP. You’ll keep all the benefits your pension offers and continue building your retirement security. Before you make any decisions, view our list of HOOPP employers.
If you’re thinking about moving to an employer that doesn’t offer HOOPP, or leaving the healthcare sector entirely, you can still remain a member of HOOPP and keep your benefit in the Plan. Your pension will stay safe and secure with us, and you can start receiving your monthly pension benefit once you retire. Plus, if you stay in the Plan, your pension can continue to grow with cost of living adjustments (COLA) before and after you retire.
Remember, not all pensions are designed equally. While you may have the opportunity to join another defined benefit 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 decisions for yourself.
The benefits of keeping your pension with HOOPP
You are a member of one of the largest and most respected defined benefit pension plans in Canada. We have more than 400,000 members who know that their HOOPP pension will provide a reliable source of monthly retirement income. Being a HOOPP member is valuable for a number of reasons that would be hard to find elsewhere:
- You are our member, not our customer, and we aren’t driven by profits or private interests. We were established in 1960 for one purpose: to provide lifetime pensions to Ontario’s healthcare workers.
- Your HOOPP pension is based on a formula, not stock market returns; you won’t have to make investment decisions or stress about market fluctuations. HOOPP remains strong, well-positioned and fully committed to delivering on our pension promise to members.
- You will never outlive your HOOPP pension; it will be paid for the rest of your life, even if you live to be over 100 years old.
- Saving for retirement with HOOPP is simple and efficient, and research shows it is four times less expensive than saving on your own.
- You’ll have control over when you start your pension, with the ability to retire as early as age 55, plus you’ll also know exactly what you’ll receive every month with a predictable retirement income.
- With HOOPP, you get added protection for your loved ones, where applicable, in the form of survivor benefits, at no additional cost to you.
The risks of leaving HOOPP
While taking your pension out of HOOPP 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:
- You’ll pay more tax than expected: A portion of your lump-sum benefit may be paid in cash, subject to withholding tax of up to 30%. This cash portion is also reported as taxable income in the year you receive it. The bottom line is that applicable taxes can end up significantly reducing the net amount that you receive and that means you could end up having less money to invest than expected.
- You’ll need to take on difficult investment decisions: It may be challenging, especially during volatile markets, for you (or your advisor) to invest and manage your retirement funds while generating enough of a return to equal your guaranteed lifetime pension at HOOPP. The last thing you want is to be forced to continue working longer than planned just to make sure you have enough money to retire.
- You don’t know how long you’ll need income: With do-it-yourself investing, or investing through an advisor, you run the risk of outliving your money if your retirement lasts longer than expected. Or, you might be overly conservative with your spending during retirement and compromise your lifestyle unnecessarily. Those concerns are eliminated if you have a predictable lifetime pension like HOOPP.
- You’ll lose valuable benefits: Replacing valuable HOOPP benefits such as survivor benefits and inflation protection can be very difficult and costly to do through a financial services provider.
Get the full story – watch this video and learn about the advantages of staying in the Plan.
Here’s what you need to know
This table summarizes the key differences between staying with HOOPP and giving up your HOOPP benefit.
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Keeping your pension
in HOOPP
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Giving up your
HOOPP pension
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| Who is responsible for investing the money? |
HOOPP’s experienced investment team manages the Fund on behalf of HOOPP’s 400,000 members to provide a secure lifetime pension.
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You are responsible for your own investment decisions and bear the risks of market volatility and underperformance.
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| Will you have enough to last through retirement? |
Your HOOPP pension provides you with secure and predictable retirement income for life. You won’t outlive your pension.
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Depending on the choices you make and how the markets perform, you could outlive your savings, be forced to spend less or work longer.
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| What will your income be like at retirement? |
Your pension income is based on a formula that includes your earnings and years of service. It’s payable for life.
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How much you can get and how long it will last depends on the choices you make and the performance and volatility of your investments.
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| Will you have coverage from rising prices? |
With HOOPP, you will have coverage through a cost of living adjustment, as approved annually by the Board.
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This is unlikely, as it’s difficult and costly to obtain or replicate.
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| Will your loved ones be protected? |
Your HOOPP pension includes generous benefits for your spouse or, where applicable, your beneficiaries.
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They will possibly be protected, depending on the retirement income strategy you choose and whether there’s any money left.
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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.
We’re here to help
We are committed to providing you with the information you need to make the right decisions, whether you choose to change employers, or leave the healthcare industry 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.
You can contact our Member Services team at 416-646-6445 or 1-877-43-HOOPP (46677). We are available Monday to Friday, 8 a.m. to 5 p.m., Eastern Time.
Article first published November 18, 2020