How much do I contribute?
You contribute a percentage of your pensionable earnings to the Plan. The percentage is approved by the Canada Post Board of Directors and is subject to Plan provisions. Once you have attained 35 years of eligibility service, your contributions reduce to 1% of your pensionable earnings.
As of January 2019, from each pay, you contribute:
|9.2% of your pensionable earnings up to the YMPE|
|12.7% of your pensionable earnings above the YMPE|
Here's an example:
- Yearly pensionable earnings: $58,000
- 2019 YMPE: $57,400
|9.2% x $57,400 = $5,280.80|
|12.7% x ($58,000 - $57,400) = $76.20|
|Total annual contributions = $5,357.00|
How do I contribute?
Your contributions are automatically deducted from your pay, before income tax.
How much does Canada Post contribute?
Canada Post is responsible to fund the difference between your contributions and the amount required for pension benefits accruing during the year, plus additional special payments to cover deficits that may arise from time to time, based on the latest actuarial valuation report.
What rate of interest do my contributions earn?
The rate of interest earned by your contributions is equal to the rate earned by the pension fund's investments, minus its investment-related expenses. However, your pension benefit does not depend on this rate. Your benefit is calculated using the predetermined formula set out in the Plan.
How long do I have to contribute?
You contribute to the Plan from the date you join until:
- your employment with Canada Post terminates, or
- the end of the year in which you reach age 71 or
- your death
whichever happens first.
Can I use my contributions in the Plan as collateral for a loan?
No. You cannot use your contributions in this way. They cannot be assigned to anyone else to pay a debt or secure a loan, whether as a voluntary act or by law.
Can I make extra contributions to increase my pension benefits?
Where are my contributions and those of Canada Post held?
Your contributions, Canada Post's contributions and the investment income earned are held in trust by a professional trust management company. The funds are kept separate from Canada Post's day-to-day operating funds.
Do contributions affect my personal RRSP contribution limit?
While your contributions do not reduce (on a dollar-for-dollar basis) your RRSP contribution room, the pension benefit you are building up under the Plan does. The Income Tax Act limits tax-deductible contributions to your RRSPs to 18% of your previous year's earned income, to a maximum of $26,500 in 2019, minus the pension adjustment.