Contributing to the Plan
How do contributions work?
The PSPP is a contributory defined benefit (DB) plan, which means that you and your employer contribute to the Plan to help fund your future pension benefit. On average, contributions fund only 20–25% of your pension; the other 75–80% is funded by investment returns. That means you and your employer fund about 20 to 25 cents of each pension dollar that PSPP retired members receive – that’s a pretty good return on your investment.
Contributions are automatically deducted from your pay each period and deposited directly into the Plan Fund to allow you to start building your pension credit.
How much do I contribute?
You contribute 7.4% of your annual salary up to the year's maximum pensionable earnings (YMPE), plus 10.5% of your annual salary above the YMPE.
In other words, you contribute:
$7.40 for every $100 you earn up to the YMPE, plus $10.50 for every $100 you earn above the YMPE.
Different contribution rates apply for OPP officers and civilians. Please read For OPP members page for more information.
Contributions are tax deductible
Don’t forget – PSPP contributions are tax deductible up to the Income Tax Act limit. That means your contributions are helping provide you with guaranteed retirement income for life, while reducing your taxes today.
Your annual salary is your regular base salary. It excludes overtime pay, pay in lieu of benefits or payments that aren’t part of your regular annual salary.
The YMPE is a figure set by the federal government that determines benefits and contributions under the Canada Pension Plan (CPP). The YMPE is adjusted each year based on average wages. For 2019, the YMPE is $57,400.