Member Frequently Asked Questions
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Visit the Annual Statement section, for statement questions.
Q. Is HOOPP removing COLA?
A. Cost of living adjustments (COLA) have not been removed, but the way such adjustments are applied will change. COLA is still guaranteed on any portion of your pension that relates to contributory service earned before 2006. COLA will be provided on an ad hoc basis for the portion of pensions based on contributory service acquired after 2005. See the next question for an explanation of how ad hoc COLA works.
Q. If COLA is ad hoc, doesn't that just mean there won't be any?
A. No. It is important to remember that ad hoc COLA increases do not automatically mean zero increases – ad hoc COLA for post-2005 pension service can range from zero to 100 per cent of the previous year's increase in the consumer price index (CPI.). It means the Board has the flexibility to apply COLA increases responsibly in the context of the Plan's overall financial health, to manage the Plan for the benefit of all members, pensioners, and employers. Should the Board find itself unable to provide COLA in a given year, it is possible that it could approve a “catch up” in subsequent years – as it has in the past on more than one occasion.
Q. Will my pension be there when I retire?
A. Yes. HOOPP is designed to run in perpetuity, and few retirement savings are as safe as the pension benefits you've earned in HOOPP.
Your pension is based on a formula and isn't directly tied to the ups and downs of financial markets.
The Board considers its commitment to pay promised pensions to be paramount.
Q. Can I opt out of HOOPP?
A. No. There is no "opting out" provision under HOOPP. Once you join the Plan, you continue as a member until you terminate employment or retire at all your HOOPP employers.
Q. Can I take my money out of HOOPP?
A. Yes, but only if you terminate from HOOPP (by terminating employment at all your HOOPP employers) and are under age 55. You have the option of transferring your benefits out of HOOPP, either to another pension plan or any locked-in retirement savings vehicle.
If you are over age 54, you can only transfer your benefits to another employer's plan, if that plan will accept them.
Q. How long will it be to process my termination benefit?
A. It normally takes four to six weeks for HOOPP to send you a benefit options form outlining your termination options. The time it takes to process the option you select depends on how quickly you return the signed benefit form, along with any additional required documentation.
Q. What happens to my pension benefits if I terminate employment before retiring?
A. If you are planning to go to work at another HOOPP employer, you can select the "decision pending" option at termination. This means your benefit will not be struck for a period of up to six months while you look for work. You build no additional pension benefits during this period, but your contributory service and eligibility service will resume once you start making contributions again at your new HOOPP employer. If you don't find work by the end of the six-month period, you will receive your other termination options, as described in the next sentence.
If you are not joining another HOOPP employer following termination, you will have a number of options, depending on your years of eligibility service and age. If you are not vested, you will receive your contributions, plus interest. Different options are available if you are vested, and are under age 55 or over age 55.
Q. Will my termination benefit be taxed?
A. If you elect a deferred pension - leaving your benefits in HOOPP upon termination to collect later as a pension - your benefits will not be taxed. You will not pay tax on your HOOPP benefits until you begin to receive your pension.
If you elect to transfer your benefits out of the Plan at termination, any amount in excess of the government limits for transfer will be subject to withholding tax, and the balance will be taxed as income in the year it is received. Further tax may be payable on this amount, depending on your personal rate of income tax.
Q. I joined my current employer under a Section 80 transfer and still have benefits with my former employer's pension plan. How will my pension be paid?
A. You'll receive separate pensions from HOOPP and from your former employer's pension plan. Your period of employment with the HOOPP employer you transferred to will be factored into the benefits you receive from your former pension plan, and your period of eligibility service with the former pension plan will be factored into the benefits you receive from HOOPP. That's because - for pension purposes - your employment is deemed to have been unbroken. These special rules will help you meet early retirement requirements sooner than you might otherwise have.
Q. Can I unlock my HOOPP pension funds due to financial hardship?
A. No, you cannot. Funds held in registered pension plans like HOOPP are not eligible for financial hardship unlocking. Unlocking and withdrawal applications can only be made for funds held in LIFs, LIRAs and LRIFs.
For information about applying for Financial Hardship withdrawal from LIFs, LIRAs and LRIFs, visit the Financial Services Commission of Ontario (FSCO) website, or call FSCO at 416-250-7250 or
1-800-668-0128.
Q. How do I get a pension estimate?
A. You can produce your own pension estimate by using our pension calculator. The calculator has been reprogrammed and can be used to obtain estimates of the costs of optional forms of pension.
Also, your HOOPP Annual Statement gives you an idea of what your future pension will be if you retire at three key ages – usually age 55, 60, and 65.
You can also, request an estimate directly from HOOPP or through your employer.
Q. What happens to my pension if I retire before reaching age 65?
A. Your pension will be reduced unless you are age 60 or older (and vested) or age 55 and older, with at least 30 years of eligibility service, when you retire. These reductions offset the fact that you are receiving a pension earlier, and therefore, are likely to collect it longer. Reductions are permanent and apply to any pension that may be payable to your surviving qualifying spouse (by law, your primary beneficiary for HOOPP benefits unless a waiver is signed) after your death. HOOPP's Early Retirement Table shows how age and eligibility service affect early retirement reductions.
Q. Will my pension be taxed?
A. Yes, your pension will be taxed.
Any pension estimate you receive from HOOPP, or generate using HOOPP's pension calculator, or shown on your annual statement shows pre-tax benefit amounts.
Q. Why should I contribute for a leave 31 days or more in length?
A. By making contributions for a leave you build contributory service, a key factor in HOOPP's pension formula.
Consider the imaginary case of Susan and Jill, who are both 55 years old. They each have three children and have been working at the same hospital for 15 years. However, Susan contributed to HOOPP for all three of her one-year pregnancy leaves. Jill did not. They each have average annualized earnings of $55,000. Both women are considering retiring this year. Assuming the average annual year's maximum pensionable earnings (YMPE) is $40,000, Susan's basic annual lifetime pension will be 25 per cent bigger than Jill's ($10,460 versus $8,370 respectively). Early retirement benefits have not been included in these examples, and amounts quoted are before tax.
For more information, visit our Leaves section.
Q. Can I stop making contributions?
A. HOOPP allows members to stop contributing to the Plan in different situations:
- at the point members switch to part-time work from full-time work
- if the member becomes employed full time at one employer and part time at others - if this happens, the member can stop making contributions at the part-time employer
When you're on an employer-approved leave of 31 days or more in duration, you don't have to make contributions, but you can if your employer agrees. Employer approval isn't required for contributions for pregnancy/parental leaves, strike/lockout periods, emergency leaves, or family medical leaves.
Q. Why is there a primary and a secondary beneficiary?
A. If you have a qualifying spouse he or she is by law your primary beneficiary and is automatically first in line for any benefits payable from HOOPP upon your death unless a waiver has been signed. This entitlement is guaranteed under Ontario's Pension Benefits Act.
If your spouse is your primary beneficiary, you can also name a secondary "non-spouse" beneficiary -- someone who will receive any remaining HOOPP benefits payable after both you and your qualifying spouse have died.
If you don't have a qualifying spouse, you can name any person, persons, or your organization as your non-spouse beneficiary.
You will be asked to confirm your beneficiary choices (i.e., spouse and non-spouse beneficiaries) at the time you terminate from the Plan or retire.
Q. What if I get a new spouse after I retire – can he or she get a pension upon my death?
A. Currently, only the spouse you had at the time of retirement (if applicable) can receive a pension upon your death. Starting in 2006, because of a Plan change, pensioners are able to provide a survivor pension to a new, post-retirement spouse at the member's expense, provided there was no qualifying spouse at retirement (or that spouse has since died) and certain other conditions are met.
Q. If I have no spouse, what does my beneficiary get when I die?
A. If you have no spouse, you can name any person, persons, or organization as your non-spouse beneficiary.
If you are not vested (have not belonged to HOOPP for at least two years) and die before retiring, this beneficiary will receive a refund of your contributions to HOOPP, plus interest.
If you are vested and die before retiring, this beneficiary will receive a lump sum equal to the commuted value of your basic lifetime pension and any bridge benefit you have built to date. In addition, HOOPP will pay out any refundable contributions you would have been entitled to receive.
If you have no spouse upon retirement, (or if spousal benefits are waived) you will receive a life pension -- guaranteed 15 years form. If you die before receiving a monthly pension for 15 years (180 payments), your non-spouse beneficiary will receive your monthly pension, excluding any bridge and transition benefits, for the balance of the 180-payment period.
Q. Where does HOOPP's money come from to pay pension benefits?
A. There are two sources - contributions and investment returns. The general rule of thumb is 80 per cent of pension benefits are paid from investment returns, while the other 20 per cent is paid from contributions.
Q. What happens if I go from full to part time and stop contributing?
A. You would continue to build eligibility service, but would no longer build any contributory service. Contributory service is a key part of HOOPP's pension formula; the more service you have, the bigger your pension will be. The period when you stopped contributing will not be available for past service purchase.
Q. If I retire before age 65 and start collecting Canada Pension Plan (CPP) benefits, will this in any way affect my HOOPP bridge benefit and/or transition benefit?
A. Receiving CPP benefits has no effect on a member's HOOPP benefits. The bridge and transition benefits are paid until age 65, and the basic pension for life, even if CPP is collected earlier than age 65.
Q. What's a buyback? How does it affect my pension?
A. Under Plan provisions, you are entitled to purchase eligible periods of service and thereby increase your amount of contributory service. Your age, earnings, and years of contributory service are key factors in determining your pension benefits. A buyback will increase your ultimate lifetime pension and may improve your early retirement benefit entitlements.
Read more on how buybacks work and estimate how much it costs.
Q. What's a pension adjustment (PA)?
A. A pension adjustment is a reduction to a taxpayer's RRSP contribution room, which reflects the fact that the person is building pension benefits in a defined benefit plan. The government's intention is to create a taxation environment where taxpayers who are members of a defined benefit plan and not unfairly advantaged over those who are not.
Q. Why is my pension adjustments higher than my contributions?
A. Because HOOPP is a defined benefit pension plan, your pension adjustment (PA) is based on the benefits you earn, not your contributions. Your PA is higher than your contributions because PAs are a reflection of the deemed value of the pension benefits you have earned during the tax year. A high PA reflects the fact that you are building a big benefit.
Q. Do pension adjustments (PA) go up when contribution rates change?
A. No, PAs are not affected by changes – up or down – in contribution rates. The only time a PA changes is if a change is made to HOOPP's benefit formula.
Q. How does HOOPP's financial position compare to other pension plans?
A. Most pension plans are dealing with growing liabilities, the effects of poor investment returns in 2001 and 2002, and a declining or depleted surplus.
HOOPP was one of the first of the plans to move to implement a plan to manage its emerging unfunded liability.
Q. Are HOOPP's investments socially responsible?
A. HOOPP's Board of Trustees approved a Socially Responsible Investment Policy in 2002. HOOPP believes that, since corporations that effectively implement environmental, social, and ethical standards are likely to have better governance standards than those that do not, they are likely to be stronger and more financially successful over the long term.
As part of the analysis that goes into making HOOPP's investment decisions, environmental, social, and ethical matters are considered so that any risks that could affect future returns, and therefore shareholder value, can be assessed. In voting proxies, HOOPP encourages reasonable disclosure of the performance of companies in the areas of environmental, social, and ethical matters.
Q. Why are a large portion of HOOPP's assets in the stock market?
A. By law, pension plans are required to diversify their assets. This is to limit risk.
While equity investments, or stocks, have their ups and downs, they have proven their value over the long run. Stock market returns in both Canada and the U.S. have averaged more than eight per cent over the last 10 years. At the same time, guaranteed annual returns for Canada Savings Bonds have typically been in the range of five per cent. Although equities can be more volatile, these extra returns help pay for the pensions earned by members of the Plan.
To further limit risk, law prevents a pension plan from investing or lending more than 10 per cent of its assets to any one corporation.
Q. What's an actuarial valuation?
A. It's basically an actuarial balance sheet.
HOOPP conducts an actuarial or funding valuation every year to determine the Plan's liabilities - the amount of money needed to pay the benefits earned to date by members - and the Plan's assets. To project the growth in benefit obligations, the valuation uses assumptions about when members will retire, terminate, and die, as well as future rates of interest, inflation, and salary increases, to determine how much will be needed to pay benefits and for how long.
In estimating the value of the Plan's assets, the valuation uses a five-year average of investment return rates. This lessens the impact of short-term volatility in financial markets, to better match the value of assets to the long-term nature of the liabilities.
The valuation produces an actuarial balance sheet comparing the Plan's liabilities to its assets to determine if sufficient funds have been set aside to date. The valuation may show that the Plan is fully funded, in a surplus position, or has a funding deficiency.
As part of the funding valuation, the actuaries project the Plan's assets and liabilities out for several years, to determine the future range of the Plan's financial position over different possible outcomes. These projections assist the Board in determining the amount of money the Plan needs, via member and employer contributions, to fund benefits as they continue to be earned.
HOOPP is required to file a valuation report with the Financial Services Commission of Ontario at least every three years.
Q. What's the connection between investments and my pension?
A. HOOPP pensions are based on a formula that takes into account a member's earnings history and service in the Plan. This formula isn't directly affected by the ups and downs of the financial markets. Poor investment performance can have an effect on the overall funded status of the Plan and this, in turn, could affect contribution rates, benefits, or both, depending on the approach taken by the Board.
Generally speaking, 20 cents of every pension dollar you'll receive from HOOPP was paid by member and employer contributions. The other 80 cents will be covered from the Plan's returns on the investment of those contribution dollars.
Q. Is HOOPP considering alternative investments as a way of maximizing returns?
A. HOOPP already has approximately 10 per cent of its portfolio committed to alternative investments, including real estate, private equity and special situations, and activities relating to our derivatives portfolio. The Plan is constantly looking at new investment opportunities that will provide added return, lower risk, or ideally both. Before committing to any new opportunities, HOOPP must ensure that the resources, processes, and structure to manage any new asset class are in place.
Q.How did the investment Fund do?
For full financial details, read HOOPP's Annual Report.