Frequently Asked Questions (FAQs)
Updated January 2019

A. A JSPP is a pension plan that offers defined benefits and is jointly sponsored, governed, and funded by the employers and plan members. A member’s retirement benefit under a JSPP is based on a preset formula, typically with reference to years of pensionable service and earnings. There are several large Ontario pension plans which are JSPPs, including the Ontario Teachers’ Pension Plan, OPSEU Pension Plan, HOOPP (healthcare), OMERS (municipal), and CAAT (colleges).

A. There are many advantages to be gained by moving to a JSPP, including the following:

• With the move to a JSPP, there will be greater transparency into plan operations, funding and decision-making, due to the joint role of plan members in plan sponsorship and governance;

• Ontario’s rigorous pension plan funding rules are designed for single-employer defined benefit plans, which may be vulnerable to bankruptcy and plan windup in a way that universities are not. Under a JSPP, contributions for both the employers and employees will be more stable and predictable, due to an exemption from solvency funding obligations;

• Years of low interest rates, volatile investment markets and rising life expectancy have led to funding shortfalls and climbing contribution rates for university plans; and

• Under a JSPP involving multiple universities, efficiencies and economies of scale are achievable due to a much larger pool of assets and liabilities;

• Successive governments have made clear that the current funding model can’t be sustained in the public and broader public sector. Therefore, change is both necessary and inevitable. By being proactive and working together to create a JSPP, the universities and employee groups have the ability to design a solution that works for them, without the solution being imposed.

A. Currently, Queen’s University, the University of Guelph, the University of Toronto, the faculty associations, USW, and non-unionized employee groups at those universities are working together toward being the first participants in the UPP. Other unions representing employees at the three universities are currently considering their participation. Once operating, the UPP would be open to other universities and employee groups as well.

A. All pensions earned under a current university plan would be transferred to the UPP, and there will be no changes to pension benefit amounts already accrued.

For active employees who have earned benefits under one of the current university plans, all benefit amounts earned under those plans will be transferred to and administered by the Administrator of the UPP. Current employees who retire under the UPP and have prior service in one of the university plans will receive a pension based on two parts: one based on the formula in their former plan and the service they accrued under that plan, and one based on the UPP formula and their service accrued under the UPP.

A. Members who have retired under a current university pension plan before conversion to the UPP will continue to be paid the same amount of pension after conversion. Their pensions will not be affected by contribution increases, if any, and they will receive cost-of-living increases after conversion as they would have under their current plan.

A. For an active employee, at inception of the UPP, the pension earned after joining the UPP will be based on a new harmonized benefit formula:

FAQ6-Average Earnings

“Average Earnings” for service under the UPP will be based on the member’s average earnings during the best 48 months of eligible employment. Average Earnings will be determined at a member’s retirement, termination or death.

“Average YMPE” related to service under the UPP will be based on the average Year’s Maximum Pensionable Earnings (“YMPE”) for the last 48 months of eligible employment. (For reference, the YMPE for 2018 is $55,900).

The UPP will implement the new earnings breakpoint under the Canada Pension Plan (CPP), the Year’s Additional Maximum Pensionable Earnings (YAMPE), when it comes fully into effect in 2025.

As with all registered pension plans, the UPP pension benefit will be subject to the maximum pension limits under the Income Tax Act.

A. Normal Retirement Date – the normal date upon which a member may retire with an unreduced pension under the UPP will be age 65.

Early Retirement Date – a member will be able to retire from the UPP after reaching age 55. If the member does not meet the eligibility requirements for an unreduced pension, then the pension will be reduced by 5% for each year between the pension start date and NRD.

Early Unreduced Retirement Date (EURD) – a member will be able to retire early with an unreduced pension for benefits earned under the UPP upon reaching age 60, provided that the sum of the member’s age plus years of continuous service (including service under a predecessor pension plan) equals 80 or more.

Grandparenting of Early Unreduced Retirement – the current plans have many different EURDs for different groups, which are being harmonized under the UPP for UPP service. The early unreduced retirement provisions of your current pension plan will be applied to benefits earned for service up to the date you join and start accruing benefits under the UPP. The provisions of the UPP as described above will be applied to any benefits you earn under the UPP. However, for current members of the University of Toronto and University of Guelph pension plans, if you are age 52 or older on the date you join and start accruing benefits under the UPP (anticipated to be July 1, 2021), and your current EURD provision is better than the new UPP EURD, then your current EURD provision will continue to apply to your pension for benefits earned after the start of the UPP. The current Queen’s University plan does not provide for an early unreduced pension under the defined benefit minimum guarantee before NRD.

Please note, the existing university plans have numerous early retirement provisions for different employee groups that are being harmonized under the UPP. The age 52 threshold was designed to ensure that those employees who are approaching retirement do not have their planning disrupted by transition to the UPP.

A. Shared governance and shared risks (costs) are the two fundamental features of a JSPP and are two of the legal requirements for a plan to be considered a JSPP.

Shared governance means that decisions regarding plan design and funding are made by the two Joint Sponsors, which will be comprised of equal representation of: (1) the employers and (2) faculty associations and unions representing plan members. Since those decisions impact the cost of the plan, that cost is also shared. Subject to certain transitional measures, costs will be shared 50%/50% between employers and UPP members.

Sharing costs starts with setting employee and employer contribution rates, which will be determined by the Joint Sponsors. Plan members and employers will also share any future surpluses or going-concern deficits that might arise related to the pensions earned under the UPP. Pension benefits earned before conversion to the UPP will be transferred into the UPP and will be unchanged. Going-concern deficits transferred from the existing pension plans will be funded by the universities over 15 years.

A. The UPP is anticipated to be effective as of July 1, 2021, and the UPP plan text will reflect existing arrangements that are part of internal university policy. Accordingly, individuals who are currently working under these types of arrangement, as well as new participants, will not have their eligibility for such arrangements impacted by the conversion to the UPP. These arrangements will remain subject to internal university policy and could change as a result of negotiations with collective bargaining agents in the future.

If a member is approved for one of these types of arrangements that carries over after the start of the UPP, then the contribution rates and benefit formula will be based on the provisions of the UPP for service after the start of the UPP.

A. Environmental, Social and Governance (“ESG”) factors have been, and continue to be, an important focus in the university community. The UPP will be subject to the regulations with respect to pension plan investments, as prescribed under the Pension Benefits Act. Those regulations include the requirement that the plan administrator establish a Statement of Investment Policies and Procedures (“SIP&P”) for the plan that contains information about whether ESG factors are incorporated into the plan’s investment policies and procedures and, if so, how those factors are incorporated.

The administrator of the UPP will be a Board of Trustees, with the Trustees appointed by the employers, faculty associations and unions, and one Trustee nominated by the non-unionized employees. The UPP members will therefore have representatives on the Board of Trustees through which the importance of ESG factors in the SIP&P can continue to be voiced.

A. In order for the proposed conversion to proceed, the Pension Benefits Act and regulations require that:

• at least 2/3 (two-thirds) of the members of the current plans must give their consent; and

• no more than 1/3 (one-third) of the retired members, former members and other persons entitled to benefits under the current plans, as a group, object.

For members who are represented by a trade union (which includes both certified bargaining agents and bargaining agents such as faculty associations, which are not certified), the trade union may consent on behalf of the members it represents. Before consenting on behalf of its members, each bargaining agent will likely hold an internal vote among plan members in the bargaining unit to determine whether a majority support moving to the UPP. Where a trade union consents, the trade union is deemed to have consented on behalf of all plan members in the bargaining unit. If you are represented by a trade union, then you may contact your local representative for more information about how that trade union will be proceeding.

If you are a non-faculty non-unionized employee, you will receive an individual consent form as part of the regulatory consent process. If you wish to provide your consent to the proposed conversion, then you must submit the consent form as outlined on the form itself.

In addition to the consent requirements, the administrators of the current plans must provide notice of the proposed conversion to the UPP to all members, former members, retired members and other persons entitled to benefits under the current plan. Members can expect to receive a notice in spring 2019.

A. The UPP will be a jointly sponsored, multi-employer defined benefit (DB) pension plan that is intended to be open to the entire university sector in Ontario. The University of Guelph, Queen’s University, University of Toronto and their respective employee groups are working diligently to make the UPP operational, with a target effective date of July 1, 2021. Those involved in the formation of the UPP are fully committed making it open to the wider university sector once it is operational. We will continue to communicate with the broader community as more is known.

A. One of the advantages of moving to sector-wide pension plan is that your pension would follow you if you became employed at another university that participates in the UPP. The new UPP would mean that a staff member at any of the participating universities could chose to take a job at another participating university and there would be no break in your pension service, provided that both positions were eligible for participation in the UPP – your full pension would continue seamlessly and continue to grow with your new employer.

A. The University of Toronto, the University of Guelph and Queen’s University are the Administrators of their current pension plans and, in that capacity, hired the current service providers. The Universities will remain as the Administrator of their pension plans until the start of the UPP, which is anticipated to be July 1, 2021. Under the UPP, the Administrator will be a Board of Trustees, with representation from both employers and members of the UPP. Once the Board of Trustees is appointed, they will determine which service providers will provide services to the UPP.

A. Under the UPP, pension payments will be paid on the first day of the month.

A. The pension you have earned for service before the start of the UPP will continue to be based on the definition of average earnings under your current pension plan.

Your pension earned for service after the start of the UPP will be based on the average of your best 48 months of pensionable earnings.

The determination of your average earnings will be made at the time of your retirement, termination or death. The pensionable earnings used for determining both averages will be based on the best (highest) pensionable earnings from your entire career, whether earned before or after the start of the UPP.

A. The creation of the new UPP and the transfer of assets from the current university pension plans is a complex process, and requires the approval of the Superintendent of Financial Services (the Ontario pension regulator). The creation of the UPP will unfold in two stages:

1. January 1, 2020 is the expected inception date (i.e., when the UPP will be formally registered with authorities); and

2. July 1, 2021 is the date the UPP is anticipated to come into effect (i.e., when benefit accruals are anticipated to start).

In order to provide adequate time for the regulatory process and ensure that the systems and processes are in place for a seamless transition, the new UPP will initially be registered and the Board of Trustees (which will be the Administrator of the UPP) will be appointed as of January 1, 2020. Then, after the Superintendent has provided consent to the transfer of assets, the new UPP will come into full effect on July 1, 2021. After this date, current retirees will have their pension benefits paid from the UPP, and active members will begin to contribute to and accruing pension benefits under the terms of the UPP.

A. On the UPP site (www.universitypension.ca), you can elect to receive UPP updates by clicking on Register here and completing the registration form. You will immediately be added to the mailing list and will be notified when new information is posted.