My InfoAssociation of Professors of the University of Ottawa

The supplemental pension plan

The supplemental pension plan gives an amount to participating members which, when added to the benefits of the basic plan, provides an additional pension to the maximum prescribed by the Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)).

The Supplemental Pension Plan is not a registered pension plan.

Eligibility

To be eligible, your average salary has to exceed the average maximum salary of $165,088.65 as set by the Canada Revenue Agency (CRA).

As of January 1, 2019, it provides a benefit up to the Plan average maximum salary of $217,430 and the maximum salary for the supplemental plan contribution is $232,304.

Contributions to the Plan

Contribution of the employee

For 2019, your contributions to the Basic Pension Plan are based on the following formula:

  7.15% x your salary
         up to the integration level
+ 10.95% x your salary
         above the integration level
         (maximum salary: $232,304)
----------
= your contribution

The deemed contributions for the Supplemental Pension Plan are for the salary between $165,088.65 and $232,304 in 2019 and are deposited in the basic pension fund.

Because of a tax rule of the Canada Revenue Agency, the contributions based on your salary that you make to the Pension Plan are not subject to income tax. As a result, you save on tax immediately.

Contribution of the employee

The University's contribution is based on a percentage of the salary mass. It is determined each year and is the amount required to meet all obligations of the Plan.

          8.70% x your salary up to the integration level
      + 13.5% x your salary exceeding the integration level
                 (maximum salary: $232,304)
      ___________
      = your contribution
      
      The integration level is set by the University's Pension Plan; 
      it is presently fixed at $39,459
    

Your pension benefit

The Supplemental Pension Plan is currently funded for the pensionable service for the period of January 1, 1999 to December 31, 2007. Under the current Supplemental Pension Plan provisions, the pre-1999 service does not provide for a pension benefit.

For the 2008 pensionable service and after, your deemed contributions for the salary above the maximum pensionable earning set by the Canada Revenue Agency (CRA), will be refunded to you at termination or retirement with interests.

Based on the formula and example in the chart below, your best 60-month average salary will be covered up to the maximum average (set at $217,430 as at December 31, 2018), which was determined to exceed the maximum pensionable earning ( $165,088.65) set by the Canada Revenue Agency as of January 1, 2019.

Pension calculation formula

Service to December 31, 1998 (pre-1999)

  pre 1999 dollar limit for 2019
- maximum pension as per the CRA for 2019
----------
= total annual pension pre 1999

Service post 1998 (from 1999 to 2003))

  $31,790 x 1,3% x years of contribution
+ (average maximum salary – $31,790) x 2% x years
                      of contribution
- maximum pension as per the CRA for 2019 x years
                      of contribution
----------
= total annual pension post 1998

Service post 2003 (from 2004 to 2007)

  $57,400 x 1,3% x years
                      of contribution
+ (average maximum salary – $57,400) x 2% x years
                      of contribution
- maximum pension as per the CRA for 2019 x years
                      of contribution
----------
= total annual pension post 2003

Total Annual Pension (the addition of the three preceding amounts)

  total annual pension pre 1999
+ total annual pension post 1998
+ total annual pension post 2003
----------
= total annual pension, University of Ottawa

Example

The data used as an example

  • Reference date: December 31, 2018
  • Age: 60 years' old
  • Years of service: 25
  • Average salary: $170,000
  • Integration level 2003: $31,790
  • CRA maximum pre-1999: $2,828.92
  • CRA Maximum for 2019: $3,025.56
  • Integration level 2003 = YMPE 2003 (the year's maximum pensionable earnings for 2003)= $31,790
  • Integration level 2019 = MGAP 2019 (the year's maximum pensionable earnings for 2007)= $39,459
  • Minimum pension rate: 1.5%
  • Maximum pension rate: Service pre-2004: 1.3%; Service post-2003: 2%

For the service period up to 31 December 1998 (pre-1999)

  $2,828.92 (CRA maximum pre-1999)
- $3,025.56 (CRA maximum for 2019)
-----------
=     $0.00 (total annual pension pre-1999)

For the service period post 1998 (from 1999 to 2003)

   $2,066.35 ($31,790 x 1,3% x 5)
+ $13,821.00 (($170,000 - $31,790) x 2% x 5)
- $15,127.80 ($3,025.56 x 5)
-----------
=  $  759.55 (total annual pension post-1998)

For the service period post-2003 (from 2004 to 2007)

   $2,051.87 ($39,459 x 1,3% x 4)
+ $10,443.28 (($170,000 - $39,459) x 2% x 4)
- $12,102.24 ($3,025.56$ x 4)
-----------
=    $392.91 (total annual pension post-2003)

Total annual pension (that is the sum of the three preceding calculations)

      $0.00 (total annual pension pre-1999)
+   $759.55 (total annual pension post-1998)
+   $392.91 (total annual pension post-2003)
-----------
= $1,152.46 (grand total) 1

Pension Plan Publications

Annual indexation of pension benefits (inflation protection)

There is no automatic indexation.

Annual Member Statement

There is no annual pension plan statement for the supplemental pension plan; on request only.

1 The payable pension: at least 10% of the current YMPE otherwise a lump sum actuarial value