The basic pension plan
The University of Ottawa Pension Plan is a defined-benefit pension plan
This means that, at the time of your retirement, you will receive a pension based on a specific formula; in the University's case, that formula takes into account the average salary of your best 60 months of earnings and the number of years of credited service you have in the Plan.
New regular employees aged 30 or more
New employees in a regular position who are eligible for employee benefits and are 30 or over must join the Plan as soon as they begin working at the University.
Regular employees under the age of 30
Employees in a regular position who are eligible for employee benefits and are under the age of 30 may become members from the start of their employment or on the first day of any month before turning 30 years old. If they do not elect to participate, they automatically become members on the first day of the month following their thirtieth birthday.
Effective May 1, 1992, persons eligible for employee benefits and hired on that date or later have had to become members either on the first day of the month immediately following two years of service at the University, or on the first day of the month immediately following their thirtieth birthday.
Contractual employees who do not fall in the above categories
You may choose to join the pension plan on the first day of any month immediately after two consecutive calendar years in which you worked continuously and in each of these two consecutive calendar years you either:
- earned at least 35% of the YMPE,or
- worked at least 700 hours.
A member who has retired under the University Pension Plan and is receiving a pension benefit cannot become a contributing member again if re-hired by the University.
Contributions to the Plan
Contribution of the employee
Your contribution to the basic pension plan are based, paycheck by paycheck, on the following formula:
7.15% x your salary up to the integration level + 10.95% x your salary exceeding the integration level (maximum salary: $244,106) ---------- = your contribution The integration level is set by the University's Pension Plan; It is presently fixed at $41,299
Your contributions are based on your regular salary, which does not include special income such as overtime pay, premium pay, and bonus pay or second-salary sources.
As per a tax rule of the Canada Revenue Agency, the salary-based contributions that you make to the University's Pension Plan, are not subject to income tax. As a result, you save on tax immediately.
Contribution of the employer
The University's contribution is based on a percentage of the salary mass.
That contribution is determined each year and is the amount required to meet all obligations of the Plan. For the current year, the contribution is the following:
10.05% x your salary up to the integration level + 15.45% x your salary exceeding the integration level (maximum salary: $244,106) ___________ = employer contribution The integration level is set by the University's Pension Plan; it is presently fixed at $41,299
Your pension benefit
Under the University of Ottawa Pension Plan, your normal retirement age is the first day of the month coincident with or next following the day on which age 65 is attained. However, there are no actuarial adjustments (reductions) if you retire at 60 or when you reach factor 90.
How to calculate your basic pension
Two calculations must be made and summed: one for the share of service prior to 2004 and the other for the years following 2004; the formula is the same for both calculations except that the integration levels differ. The general formula is:
1,3% x integration level x years of contributions + 2% x (average salary - integration level) x years of contributions Your average salary is based on your best 60 months of earnings. Integration levels: For the share of service prior to 2004: $31,790 For the share of service post 2003: $41,299
The minimum guaranteed pension benefit
As part of the Pension Plan reform, the University changed the basic pension benefit formula and introduced the concept of a minimum guaranteed pension benefit which is now calculated as follows:
1.5% x average salary x years of contributions
If the result of this calculation is greater than the basic pension benefit, the pension benefit paid will be the best of the two. For an average salary under $44,000, this formula should enhance the pension benefit.
Under the rules of the Canada Revenue Agency (CRA), the maximum pension payable as of January 1, 2021 is $3,245.56 per year of pensionable service.
Calculator of your pension benefit
To obtain the approximate value of your pension benefit, the Pension plan personalized information website gives you access to a handy calculator. From this site, you can also obtain your personal retirement statement and use many financial planning tools.
If your membership in the University of Ottawa Pension Plan started before January 1, 1988, you will be deemed to have acquired voluntary contributions of $200 per year of participation before 1988. These contributions, along with accrued interest, can be transferred to a registered retirement savings plan or refunded to you when you leave the University, when you die or when you retire, whichever comes first. Note that the transfer or refund is mandatory if you leave the University or take your retirement package.
If upon your termination of employment, retirement or death, your contributions plus interest are greater than 50% of the value of your earned pension, these ''excess contributions'' can be transferred to a registered retirement savings plan or refunded to you.
Buy-back or transfer of service from another employer
As a member of the University of Ottawa Pension Plan, you may be able to buy pension credits in the Plan for the following:
- years of University service where you could have contributed but did not;
- years of University service where you contributed but then had refunded to you;
- periods of leave without pay with no pension contributions;
- periods of parental leave or special educational leave with no pension contributions;
- shortfall payment following your transfer from another employer.
The fact sheet on the acquisition of services explains this even better.
We need to know whether it’s a buy back or transfer you require as well as your employee number to process your request; please write to us. We will then proceed with the detailed calculations before sending you all options and required form by intra mail or by email. Expect a delay between your request for information and the delivery of your buy-back or transfer kit.