How we calculate your pension

Disclaimer: We make every effort to ensure that all information on this website is accurate and complete. Should any discrepancy exist, the Plan Documents, statutes, or regulations shall apply. 

The Money Purchase Pension Plan is a defined contribution pension plan. This means that retirement benefits are calculated based on total contributions (employee + employer), as well as investment returns.

In essence, a defined contribution pension plan can be compared to a Registered Retirement Savings Plan (RRSP), as contributions and investment returns accumulate in an account that becomes available at retirement.  Similarly, your pension benefit will be dependent on market returns and the amounts contributed during your career.  An important difference, however, is that your pension funds are “locked-in”: they must be used for a lifetime retirement benefit.

During retirement, Pension Services will provide annual statements confirming the state of your account. In order to confirm your information and your payment amounts, you may be asked to complete and return various forms annually prior to the prescribed deadline, as required by legislation. An Annual Report is also published to provide information about the funds, investment returns, funding status, and any other relevant changes that may have occurred during the previous year. 

Your options at retirement

Your contributions, as well as the university's, accumulate in a Money Purchase Contribution Account during your career. At retirement, you have two basic options for those funds:

1. The Variable Benefit 

The funds that accumulated in your Combined Contribution Account are converted into a "Variable Benefit Account". With this option, you retain ownership of the funds and each year, you set the monthly retirement benefit that you wish to receive (subject to statutory minima and maxima).  Please refer to the Variable Benefit fact sheet for more information, or the Variable Benefit booklet for more details on this option. 

2. Transfer Out1  

You can also opt to transfer your account balance to another registered pension plan, a life income fund (LIF), registered retirement income fund (RRIF), or purchase an external annuity from an insurance company. 

Please also see Options at a glance for more information. 

1 Such transfers must be on a locked-in basis unless at least one of the following conditions apply:
  • The funds were contributed prior to 1993
  • The account qualifies as small benefit
  • You have been determined by Canada Revenue Agency to be a non-resident for purposes of the Income Tax Act

Your additional voluntary contributions

During your career, you can also choose to make additional voluntary contributions1. At retirement, You may use these funds to enhance your retirement benefit with one or a combination of the following options (some restrictions apply):

• transfer to another registered pension plan or purchase an annuity from a life insurance company
• subject to certain conditions, use to receive or enhance an existing Variable Benefit from the plan
• if non-locked-in: receive in cash (less withholding tax), or transfer to a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF)
• If locked-in: transfer to locked‐in retirement account (LIRA) or a life income fund (LIF) (age 50 or older)

1 Eligibility subject to Income Tax Act maximums. Other conditions also apply during leaves and other situations. Please contact us for more information.

Survivor benefits after retirement

Survivor benefits are paid to a spouse, beneficiary, or estate upon a member's death.  

A spouse, as defined under the Pension Benefits Standards Act, is automatically entitled to a survivor benefit unless they choose to waive that right by completing a waiver.

With the Variable Benefit option, members essentially retain ownership of the funds in their account and each year withdraw a chosen amount (subject to statutory minima and maxima).  The survivor benefit for a pensioner receiving the variable benefit is therefore the total in the member's Variable Benefit Account at the time of the member’s death.