Annual maximum contributions for members and special members
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This page describes the annual limit that members and "Special Members" can contribute to the Plan and includes these topics:
- Contribution limit
- Contribution limits for partial years of membership
- Contributions over the limit
- "Special Members"
- Calculating limits for "Special Members".
The contribution limit is the maximum amount that may be contributed to the Plan in any year.
The annual contribution limit is based on this formula:
|70% of a member's Pension Adjustment (PA) based on the pension credit accrued in a year||+||$1,000.00||=||Annual Contribution Limit|
Refer to CRA Pension Adjustment Guide(opens in a new tab) for more information.
This contribution limit is not factored into employer payroll calculations except for "Special Members".
Contribution limits for partial years of membership
When membership begins or ends during the year, a member's PA and corresponding contribution limit will necessarily be lower.
This is how the contribution limit is calculated for a member whose
- membership begins or ends during the year (i.e., has a partial year of service) and
- annual salary would have resulted in a maximum PA of $28,610 for 2021.
The PA will be calculated based on the following assumptions, according to the example below:
Membership from January 1 - June 3, 2021: 154 days
Maximum PA for 2021: $28,610
|Items||Calculation Based On||Contribution Limit|
|Pro-rate Maximum PA||$28,610 × 154 days ÷ 365||$12,071.07 = $12,071|
|Contribution Limit||(70% of $12,071) + $1,000||$9,449.70|
Contributions over the limit
PSPP members whose annual salary is over the Maximum Contributory Salary Limit will have annual contributions that exceed the contribution limit. These contributions are
- transferred by OPB into the Public Service Supplementary Benefit Account (the "Account"), and
- not tax deductible.
Click here for details on Annual ITA Limits (PDF).
This describes what happens with member contributions over the limit.
|1||The Employer calculates and remits all contributions to OPB|
|2||The Employer does the following at the end of the year, or when the member terminates before the end of the year:
"Special Members" are members of these two groups:
- Ontario Teachers' Pension Plan Board, and
- Appointed members of the Ontario Securities Commission.
Contributions of "Special Members" are capped and, therefore, they do not contribute supplementary contributions to the 'Account'.
Calculating limits for "Special Members"
Employers must calculate the contribution limits for "Special Members" whose annual salary is over the Maximum Contributory Salary Limit.
|1||Estimate the PA, assuming that the member will stay in the PSPP until the end of the year at the same salary.|
|2||Estimate the contribution maximum.|
|3||Pro-rate the estimated contribution amount over the remaining pay periods.|
|4||Re-calculate the PA, based on the actual pension credit accrued in that year.|
|5||Determine the exact contribution maximum using the actual PA.|
Determine the difference between
|7||Collect from or refund to the member the difference.|