Your Contributions

As a member of the Plan, you will make monthly, tax-deductible contributions to your pension. Your employer will also make contributions to the Plan on your behalf.

• How much do I contribute?

  A lot goes into determining pension contributions.

  Effective January 1, 2015, plan members make the following contributions:

  10.75% of pensionable earnings up to the year’s basic exemption (YBE) of $3,500 as defined under the Canadian Pension Plan, or CPP. The YBE is a portion of salary upon which no CPP contributions are required. (Please note, however, that the YBE is included in salary for calculating CPP benefits.)

  8.95% of pensionable earnings that are above the YBE, up to and including the year’s maximum pensionable earnings (YMPE). The YMPE is the ceiling on which CPP benefits are based. It changes annually and is set at the beginning of each year.

  11.85% of any pensionable earnings above the YMPE.

  For example:

   

  Contribution formula:
  Assume YBE is:	$3,500
  Assume the 2025 YMPE is:	$71,300

   

  Assuming pensionable salary is $80,000, pension contributions will be:
  10.75% x $3,500	$376.25
  8.95% x $67,800	$6,068.1
  11.85% x $8,700	$1,030.95
  Total annual pension contribution	$7,745.30

   

  Assuming pensionable salary is $50,000, pension contributions will be:
  10.75% x $3,500	$376.25
  8.95% x $46,500	$4,161.75
  Total annual pension contribution	$4,538

• What are pensionable earnings?

  We usually think of our earnings as all of the money that we bring home from work, but when we’re talking about your pensionable, it has a specific meaning.

  For the purposes of the PSPP, pensionable earnings are the regular pay you take home (whether you are paid hourly or salaried), based on your regular work schedule with your employer.

  So, your pensionable earnings wouldn’t include things like overtime wages, meal allowances, or a banked vacation payout, for example. It’s just what you expect to earn from your regular wage.

• How much does my employer contribute?

  Employers and plan members share the overall cost of benefits earned under the PSPP. Thus, the
  employer’s contribution is equal to the contribution of its employees.

  It should be noted that there was a three-year period from April 1, 1993 to March 31, 1996, during which the contributions made by certain employers were reduced. Please refer to the pension calculation examples in section 8.5 of the Member Handbook to see the impact that this has on pension benefits.

  To identify the years during which your employer’s contributions may have been reduced, please contact us or your Human Resources Department.