Your TPP contributions are deducted from your pay each payday by your employer. Your employer also pays an amount equal to your contributions to the Plan. These contributions are invested to grow the pension fund, helping to pay for the pension benefits of its members. While contributions are important, your pension is based on your years of pensionable service and pensionable earnings, not the amount you contribute.
How much do I contribute?
There are two rates of contribution for members:
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11.3% of pensionable earnings up to the year’s maximum pensionable earnings (YMPE), and
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12.9% of pensionable earnings above the YMPE.
To view what you contribute to the Plan, check your pay stub.
How much does my employer contribute?
Your employer matches your contributions. They also contribute:
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11.3% of pensionable earnings up to the YMPE, and
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12.9% of pensionable earnings above the YMPE.
What is the YMPE?
The YMPE is an important term to understand when it comes to calculating your pension contributions.
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It is a figure established by the CRA each year.
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It is used as the ceiling for contributions to the Canada Pension Plan (CPP).
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It changes every year, on January 1st, to reflect increases in the average wage.
You are required to make contributions to the Plan, unless you meet one of the following exceptions:
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you have 35 or more years of pensionable service within the TPP.
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you are 71 years of age or older. This is the maximum age that the Canada Revenue Agency (CRA) permits pension contributions to be made.
Examples of how your pension contributions are calculated (using the YMPE for 2020, $58,700):
