Members can only contribute on pensionable salary up to $172,221. That's the 2020 salary cap set by Plan rules so your future benefit stays within the limits set by the federal Income Tax Act.
Pensionable salary is the portion of your earnings on which pension contributions are made. Pensionable salary in PSPP includes your gross basic pay for the performance of your regular duties. Subject to your employer’s salary policy, pensionable salary may also include weekend pay, shift differential, and additional pay you receive while covering another position (sometimes called acting pay).
There are some other types of pay that are not considered pensionable salary:
- Overtime pay
- Expense claims
- Variable pay (such as bonuses)
If you have questions about whether a type of pay is pensionable, you may want to ask your employer.
Maximum Amount of Pensionable Service
One component of the pension calculation is pensionable service. The Plan's maximum pensionable service is 35 years, or 35 years between PSPP and the Management Employees Pension Plan (MEPP) or the Universities Academic Pension Plan (UAPP) if you have Combined Pensionable Service (CPS).
After reaching this maximum, you stop contributing to PSPP, but your participation will continue. Increases to your salary will be considered in your pension calculation. So, if your salary goes up after 35 years, your pension payments can also increase.
Your PSPP pension contributions are tax deductible. That means they reduce the income you pay taxes on. Visit the Canada Revenue Agency's website for more information.