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Employment changes
- Members
- Employment changes
Changing employers and portability
If eligible, you can seamlessly move between UPP-participating employers, and combine part-time service at multiple UPP-participating employers.
Moving to another UPP-participating employer
If you leave your UPP employer for another UPP employer within 12 months of the date your employment ended, and you didn’t transfer any of your pension assets in your departure, your contributions will simply begin again, your memberships will combine, and your pension will be recalculated when you retire or leave for a non-UPP employer.
Moving to a non-UPP employer
If you leave your employment with an employer who participates in UPP and move to an employer who does not participate in UPP, neither you nor your new employer can make contributions to UPP.
If you leave your job with a UPP employer, you will need to decide what to do with your UPP pension. You will receive a statement of options*, as summarized below:
For members under age 55, you can:
- leave your benefits in the Plan until you become eligible to retire (the default option) or,
- transfer the commuted value of your UPP pension to a registered retirement vehicle (such as a LIRA) or another registered pension plan or purchase an annuity through an insurance company. This is a time-limited, final settlement of your UPP pension. If you rejoin UPP at a future date, you cannot put the money back into the plan and your previous service and earnings will not be used to determine your eligibility to retire or the amount of pension you will receive.
For members age 55 and older, you can:
- leave your benefits in the Plan until age 65 or,
- take an immediate pension.
You should always seek independent professional financial advice when making decisions about your UPP pension.
*Please note that if you happen to rejoin UPP before receiving your termination options package, re-entering the Plan becomes your ‘default’ selection and a lump-sum transfer is no longer available.
Commuted value
The commuted value is the total estimated value in today’s dollars of the lifetime pension you have earned and would be payable at retirement. It is an actuarial calculation that involves many factors, including your age, your assumed retirement age, mortality rates and interest rates.
Because the commuted value is a current estimate of a future value, the lump sum you may receive based on a commuted value may be greater or less than the actual pension payments that you would have received if you had elected to receive a pension from the Plan.
Transferring benefits from another pension plan
UPP allows funds to be transferred from a previous employer’s registered pension plan to UPP, under certain conditions, to be used to purchase service in the plan.
If eligible, transferring funds may allow you to:
- Receive additional service under UPP
- Increase your eligibility service, which may help you qualify for an unreduced, early retirement pension sooner.
Who is eligible?
If you earned pensionable service with your previous employer immediately before joining UPP, you may be eligible to transfer all or a portion of the value of your benefit entitlement to UPP if all the following apply:
- You stopped being a member of your previous employer’s pension plan within 12 months of becoming a member of UPP (or within 12 months of joining the university’s prior plan, whichever is earlier), and
- You apply for the transfer within 12 months of becoming a member of UPP (or within 12 months of joining the university’s prior plan, whichever is earlier), and
- Your immediately previous employer’s plan is a Canadian registered pension plan (RPP),
- You are entitled to receive a benefit from your previous employer’s plan, and
- Your previous plan allows transfers.
Please note that if you previously initiated a transfer to your employer’s prior plan, you are not eligible for a transfer under the provisions of UPP. UPP does not allow transfers from RRSPs and LIRAs, except as a shortfall payment if the funds in your previous plan are not enough to purchase the full amount of pensionable service in UPP.
Requesting a transfer
The first step is to complete and return a Pension Transfer Application within 12 months of becoming a member of UPP (or within 12 months of joining your employer’s prior plan, whichever is earlier).
Please keep in mind that the process for requesting and completing a transfer can be lengthy. The steps below outlines important items and action steps.
Steps to transfer
1. Submit an application
Complete and submit a Pension Transfer Application to UPP within 12 months of joining UPP.
2. Request data from your previous pension plan
To process your application, UPP will send a data request to your previous pension plan administrator, which will include a deadline for providing information.
3. Cost quote
Once all the requested data is received, UPP will determine the cost to purchase the pension credits from your prior pension plan in the UPP plan. The cost is the actuarial value of the pension based on UPP’s established administrative guidelines. The maximum UPP service you can purchase is limited to the service you earned in your previous employer’s plan.
4. Review options
A transfer-in election package will be sent to you to review the total cost and your payment options. The package will include:
- The total cost to purchase the pension credits from your prior pension plan in UPP,
- Payment options for any shortfall, if the funds available for transfer from your prior plan are less than the total cost,
- The impact to your UPP pension if you complete the transfer of funds, and
- All required forms to complete the transfer of funds.
You will have a limited time to review the information and decide if you wish to purchase some, all or none of the pensionable service. If you do not respond by the deadline, your application will be closed and you will lose the opportunity to transfer.
Transferring funds from a previous plan to UPP is an important decision. It’s a good idea to seek advice from an independent financial advisor.
5. Transfer funds
Once all the requested data is received, UPP will determine the cost to purchase the pension credits from your prior pension plan in the UPP plan. The cost is the actuarial value of the pension based on UPP’s established administrative guidelines. The maximum UPP service you can purchase is limited to the service you earned in your previous employer’s plan.
If you decide to transfer funds from your prior pension plan to the UPP plan, you will contact your prior plan administrator to request a transfer of funds to UPP, along with the required forms from your transfer package. The transfer of funds from your previous pension plan to UPP may take several months to complete.
When you transfer pension service, UPP is required to calculate a “past service pension adjustment” (PSPA) and report it to the Canada Revenue Agency for approval. A PSPA represents the value of the pension you wish to purchase. It reduces your RRSP contribution room for the next taxation year. Funds transferred from your prior pension plan, RRSP or LIRA will reduce the PSPA.
Shortfall payments
If the funds in your previous plan are less than the total cost to purchase the full amount of pensionable service in UPP, you may choose to make a one-time lump sum cash payment and/or transfer funds from an RRSP to purchase the remaining service. No other payment options are allowed.
If your payment is not received by the due date indicated in your transfer package, you will only be credited with pensionable service based on the funds received from your previous pension plan.
6. Complete transfer
Once the payment(s) have been processed, you will be notified that the transfer is complete. You will receive an income tax receipt for any lump sum cash payments.
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