How pension contributions work

You contribute to your pension through automatic payroll deductions. Your employer also contributes to your pension. 


How much does my employer contribute?

Every time you contribute to your pension, your employer contributes too. 

The amount of these contributions is based on your salary and either a flat accrual (for service earned on or after April 1, 2018) or how much you earned in relation to the year's maximum pensionable earnings (YMPE; for service earned before April 1, 2018). 

For pensionable service earned on or after April 1, 2018

Your employer will contribute a single amount of 9.85% of your salary; the amount of your employer's contribution will no longer be based on YMPE.

For example, if your annual salary on or after April 1, 2018, was $60,000, your employer's pension contribution in 2019 would be $5,910.00. This is calculated as follows:

9.85% x $60,000 = $5,910.00

Your employer's contribution includes a portion (2.75 per cent of your salary) paid to the inflation adjustment account (IAA)  to fund annual inflation adjustments, which are not guaranteed. Retirement group benefits (which include subsidies for extended health care premiums) are partially funded from a portion of employer contributions that would otherwise go to the IAA.
 

Page last updated: April 27, 2018


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