About the plan

Defined benefit pension plan

The University of Waterloo pension plan is a defined benefit pension plan designed to help you save for retirement. It will provide a monthly income that is paid to you for your lifetime.

The amount of pension is determined by a formula based on your earnings and credited service; it is not based on employee and University contributions. This means the amount of your pension is not impacted by the pension fund’s market performance. The pension you will receive is likely to far exceed the contributions you make.

Our plan is a registered pension plan (RPP) under the Income Tax Act, meaning contributions are tax deductible. The tax relief occurs throughout the year as Canadian Income Tax (CIT) is applied to earnings less pension contributions.

The table below highlights the key differences between a defined benefit and a defined contribution pension plan.

Defined benefit Defined Contribution
Purpose Lifetime retirement income paid monthly Retirement savings account
Contributions Contributions (employee and employer) go in to a pooled fund Contributions go in to a personal account set up for the employee
Investments Professionally managed Individuals decide how money is invested
Income Based on earnings and service – pension income is received for life Savings are used to buy an annuity – size and length of the income stream depends on total contributions, investment returns and interest rates

Member contributions, together with those made by the University, are paid into a pension trust fund. The services of professional, money management firms are used to invest the fund.

Pension and Benefits Committee

The Pension and Benefits Committee has the responsibility for setting investment objectives for the pension fund, retaining appropriate investment managers, as well as monitoring the performance of these money managers.

Each year the plan's consulting actuary analyzes both present and future pension commitments that exist in the pension plan and reports on the adequacy of the pension trust fund. The solvency of the pension fund is governed by requirements of the Pension Benefits Act (Ontario).

The Pension and Benefits Committee is responsible for the design and modification of both the pension and benefits programs. The Committee’s approach is based on the following principles:

  1. There will be one pension and benefits plan for all members of the UWaterloo community regardless of the type of work performed or the employee group to which one belongs.
  2. Benefits are provided for both the employee and his or her family where relevant.
  3. Employees should be covered for catastrophic events.
  4. The current level of benefits should be maintained.
  5. Cost implications to both the university and its employees should be considered.

The pension team

"We see you through retirement!"

The goal of the Human Resource Pension Team is to provide trusted support, targeted education and personalized consultation to ensure informed pension decisions. Our role is to care for your pensions during your working life at Waterloo and beyond. We can provide you with one-on-one meetings or set-up seminars for your area or office. Please contact us at pensions@uwaterloo.ca.