How much to plan members contribute to the USPP?
Members of the Plan are required to make contributions toward the funding of their pension benefits. These contributions are made by payroll deduction and are fully tax-deductible. The USPP is integrated with the Canada Pension Plan (CPP). Therefore, the contribution to the USPP on earnings covered by the CPP, is lower than the contribution on earnings which exceed the CPP ceiling. Plan members make the following tax-deductible contributions:
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- 9.95% of earnings up to the Year’s Basic Exemption as defined under the Canada Pension Plan. The Year’s Basic Exemption (YBE) is a portion of earnings upon which no CPP contributions are required. Please note, however, that the YBE is included in salary for the purpose of calculating CPP benefits.
- 8.15% of earnings in excess of the Year’s Basic Exemption up to and including the Year’s Maximum Pensionable Earnings (YMPE). The YMPE is the ceiling upon which CPP benefits are based. It changes annually and is set at the beginning of each calendar year.
- 9.95% of earnings in excess of the YMPE
| CONTRIBUTION FORMULA | ||||
|---|---|---|---|---|
| Assume the YBE is $3,500 | ||||
| Assume YMPE is $50,100 | ||||
| Assume Annual Pensionable Salary is $71,500 | ||||
| Pension contributions will be: | ||||
| 9.95% | x | $ 3,500 | = | $ 348.25 |
| 8.15% | x | $ 46,600 | = | $ 3797.90 |
| 9.95% | x | $ 21,400 | = | $ 2129.30 |
| Total contributions: | $ 6275.45 | |||
| Assume Annual Pensionable Salary is $36,750 | ||||
| Pension contributions will be: | ||||
| 9.95% | x | $ 3,500 | = | $ 348.25 |
| 8.15% | x | $ 33,250 | = | $ 2,709.88 |
| Total contributions: | $3058.13 | |||
What constitutes contributory / pensionable earnings?
Contributory or pensionable earnings would be any ‘normal remuneration’ paid by the employer for the normal working period of the employee. Types of pensionable earnings include Regular Earnings, Retroactive Pay and earnings while on a Temporary Assignment. However, Overtime is not pensionable. For further information please contact your Human Resource Office and/or Pensions Division.
How much does the employer contribute?
The USPP is structured such that the employer and employees share the overall cost of the benefits being earned equally. Thus, the employer’s contribution is equal to the contribution of its employees.
May plan members make additional voluntary contributions to the plan?
No.
There is no provision in the USPP to allow individuals to contribute additional funds to the Plan. Employees who wish to maximize their tax-sheltered retirement arrangements may do so by contributing to an RRSP.