Employer FAQs
Effective January 1, 2027, employee and employer contributions will resume for eligible employees who previously reached the 35-year pensionable service limit and stopped contributing. Employers should review payroll processes, employee records, and system configurations to ensure readiness for implementation.
Frequently Asked Questions About the 2027 PSPP Enhancements
Starting January 1, 2027, several enhancements to PSPP will take effect.
These enhancements reflect changing work and retirement patterns and provide members with greater flexibility and opportunities to build pension benefits. While most changes happen automatically for members, employers play an important role in ensuring payroll and reporting processes are ready for implementation.
Good to know: Contribution rates are not changing as a result of these enhancements.
On This Page
Immediate Vesting
Learn how the removal of the two-year vesting requirement affects members.
Removal of the 35-Year Pensionable Service Limit
Learn what employers need to know about members resuming contributions and continuing to earn pensionable service.
Working Beyond Age 65
Learn how PSPP will better recognize members who delay starting their pension beyond age 65.
Payroll Readiness
Review key actions to help prepare for implementation on January 1, 2027.
Immediate Vesting
What is changing?
Starting January 1, 2027, members will be entitled to the full value of the pension benefits they have earned from the day they join PSPP.
Does this change affect employer contributions?
No. Employer contributions continue to be required from the date an employee joins PSPP.
Do employers need to change their enrolment practices?
No. Existing enrolment and participation requirements remain unchanged.
Are employers required to take any specific action?
No significant employer action is required. The enhancement will be administered automatically through PSPP administrative processes.
Why is this enhancement being made?
The enhancement recognizes that career paths are changing and ensures members begin earning valuable pension benefits from their first day of participation in PSPP.
Removal of the 35-Year Pensionable Service Limit
What is changing?
Starting January 1, 2027, the 35-year pensionable service limit will be removed from PSPP rules.
What does this mean for employers?
Employees who continue working in a PSPP-participating position will continue earning pensionable service beyond 35 years.
What happens to employees who previously reached the 35-year limit?
If the employee remains in a PSPP-participating position, employee and employer contributions will resume effective January 1, 2027, and pensionable service will continue to accrue.
Are contribution rates changing?
No. Member and employer contribution rates remain unchanged.
Which employees are most likely to be affected?
Employees who previously reached the current 35-year pensionable service limit and stopped contributing to PSPP.
Do employers need to identify these employees?
Yes. Employers should work with payroll providers and administrators to ensure eligible employees resume contributions effective January 1, 2027.
Will PSPP notify members?
Yes. PSPP will provide member communications, FAQs, educational materials, examples, and webinars to help members understand the enhancements.
Can employees opt out of participation?
No. Participation requirements are not changing. Employees working in a PSPP-participating position must continue participating in the Plan.
Working Beyond Age 65
What is changing?
Starting January 1, 2027, PSPP will better recognize members who delay starting their pension beyond age 65.
Does this change require employer action?
No. This enhancement primarily affects how pension benefits are determined when a member retires.
Will employers need to change payroll reporting?
No additional reporting requirements are expected as a result of this enhancement. Employers should continue reporting pensionable service and earnings in accordance with existing processes.
Why is this enhancement being made?
More members are choosing to continue working beyond age 65. The enhancement helps ensure pension benefits better reflect a member’s later retirement date.
Will employees need to apply?
No. Eligible members will automatically receive the enhancement when their pension is calculated.
Payroll Readiness
To prepare for implementation on January 1, 2027, employers should review the following items.
Identify Employees Who Will Resume Contributions
- Identify employees who have reached the current 35-year pensionable service limit.
- Confirm those employees remain in a PSPP-participating position.
Review Payroll System Configuration
- Ensure payroll systems are prepared to resume employee and employer contributions effective January 1, 2027.
- Confirm pensionable service can continue to be reported beyond 35 years. Resumption of contributions should align with your first pay period of 2027 along with the implementation of other changes such as the annual YMPE and salary cap updates.
Validate Contribution Calculations
- Confirm current PSPP contribution rates remain in place.
- Verify no contribution rate changes are required.
Prepare Internal Teams
- Share PSPP communications with payroll and human resource staff.
- Review member and employer FAQs.
- Be prepared to direct employees to PSPP resources.
Complete Pre-Implementation Testing
- Verify affected employees are correctly identified.
- Confirm contributions calculate correctly before the first payroll cycle of 2027.
- Resolve any system issues before implementation.
Resources
Member FAQs
Direct employees to the Member FAQ page for information about how the enhancements may affect their pension benefits.
Webinars
Direct employees to register for an upcoming webinar to learn more about the enhancements and hear answers to common questions.
Contact Employer Services
If you have questions about payroll administration or implementation requirements, please contact PSPP Employer Services.