Annual maximum contributions for members and special members

On this page

This page describes the annual limit that members and "Special Members" can contribute to the Plan and includes these topics:

Contribution limit

The contribution limit is the maximum amount that may be contributed to the Plan in any year.

Calculation

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 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.

Example

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 $26,630 for 2019.

The PA will be calculated based on the following assumptions, according to the example below:

Membership from January 1 - June 3, 2018: 154 days

Maximum PA for 2019: $26,630

Items Calculation Based On Contribution Limit
Pro-rate Maximum PA $26,630 x 154 days / 365 $11,235.67 = $11,236
Contribution Limit (70% of $11,236) + $1,000 $8,865.20

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.

Stage Description
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:
  • calculates the member PA based on the pension credit accrued in that year
  • reports the maximum PA and the maximum contribution on the member's T4, and
  • notifies OPB of all PA amounts soon as possible.
3 OPB
  • receives the PA data,
  • determines the exact contribution maximum, using the above PA, and
  • reviews the data and transfers contribution amounts above the maximum to the Supplementary Account

"Special Members"

"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.

Step Action
  • At the beginning of the year, or
  • At the time the Special Member joins the PSPP if this occurs part way through the year
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.
  • At the end of the year, or
  • At the time the Special Member terminates the PSPP if this occurs part way through the year
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.
6

Determine the difference between

  • the exact contribution amount, and
  • the contributions made to date.
7 Collect from or refund to the member the difference.