What staff need to know about the University Pension Plan exploration

The University is exploring UPP now for a few reasons, including that our current plan is getting bigger—which makes it more work to manage and introduces more risk—and that our plan is doing well, which means we can take our time to explore this without pressure. And, like shopping around for car insurance every few years, it’s simply good practice to see if a different plan would better serve members.

The current stage is about understanding UPP, how it differs from the Waterloo registered pension plan (RPP), and what the change might mean for employees and for the University

If, after months of exploration, info sessions, discussions, and feedback from employees and retirees, converting to UPP seems like a reasonable option, it would go to a consent process of all plan members—but there is no commitment to proceed to that stage yet. Importantly, before a member vote is considered, the University would need to demonstrate broad support, which they have said will include formal agreement with representative groups like the UWSA.

Before a vote, there is room for the University to negotiate some specific terms with UPP, such as our representation in governance structures. With our current plan performing well, and with a significant number of employees and retirees, we’re in a decent position to negotiate. 

If we do get to a vote, all members of the pension plan at that time will get a say. Non-unionized plan members—including staff represented by the UWSA—will each submit an individual vote. For pension plan members represented by a union, approval (or not) is provided by their representatives. Retirees and former employees are not required to participate but can submit an objection. 

For consent to be reached, at least 2/3 of active members in the Waterloo RPP must approve (a positive consent requirement), and no more than 1/3 of retired and former members and survivors may object (a negative consent requirement). 

Importantly, only those in the pension plan can vote on this important decision! The current Waterloo RPP is optional for employees under 35—but many members say they wish they had joined sooner.

This was one of the most common pieces of advice shared by your colleagues in our 2024 Member Survey: Join the pension plan right away. Pension contributions do affect take-home pay in the short-term, but those extra years of contribution toward retirement income can significantly increase your pension over time—even if you’re no longer working at Waterloo when you retire.

Under UPP, participation is currently mandatory for all eligible employees. This is an important consideration, particularly for the hundreds of staff under age 35 who may not currently be enrolled in the Waterloo RPP. That means that if you’re not in the plan now because you’re under 35 and haven’t opted in, you wouldn't be eligible to vote, but you would likely be enrolled in UPP (there’s some flexibility for part-time employees) if we switched.

If we do convert to UPP, the Waterloo RPP rules and provisions (e.g., how your pension is calculated, unreduced early retirement options, indexation, etc.) would still apply to your service up to the conversion date. UPP provisions would apply following the conversion date.

At retirement, these two components would be brought together and paid to you in one combined monthly payment by UPP. This means your past and future service are both recognized; they are just calculated under different plan rules and then combined into a single benefit.

The June 22 info session highlighted several points of comparison between the plans (and more are available on the University’s UPP website). What those differences mean will vary by person based on your age, years of service, earnings, and other factors. The University is preparing examples to help you understand what would change for you. Here are just a few key comparisons:

1. Both plans are defined benefit (DB) plans. That means the amount you receive in retirement is predictable; it’s based on a formula, not on how well the plan investments perform, or on the market. 
2. The Waterloo RPP is a Single Employer Pension Plan (SEPP), while UPP is a Jointly Sponsored Pension Plan (JSPP). Here’s (a little bit of) what that means:
   • In a SEPP, the employer manages the plan, with oversight by committees—in the case of the Waterloo RPP, there are employee reps on the Pension & Benefits Committee, a committee of the Board of Governors. In a JSPP, there’s joint oversight and management of the plan. We currently don’t know how Waterloo would fit into the governance structure—that will be something the University has to negotiate.
   • In a SEPP, the employer assumes the risk, while in a JSPP, risk is shared and both the employer and members are responsible for keeping the plan funded.
   • JSPPs can offer the benefits of scale: In theory, risks are distributed across multiple employers and more members, economies of scale reduce per-member costs, and scale can provide access to better investment opportunities. However, it is not yet clear how these advantages may translate in practice with UPP compared to the Waterloo RPP and whether these efficiencies are realized for members.
3. Many (but not all) employees will be eligible for an earlier unreduced pension compared to the Waterloo plan, should they meet specific criteria.
4. Both plans provide post-retirement indexation (adjusting your pension after retirement to help keep up with inflation). The Waterloo RPP guarantees indexation up to a certain limit. UPP doesn’t have a cap on increases, but they are conditional, not guaranteed. To date, UPP has applied indexation each year.

Again, the pension you’ve earned on the Waterloo plan would not change; these differences would only apply to pension earned after the conversion date. 

The University has committed to ongoing updates of their UPP website, including providing detailed scenarios at a later date. We have raised and heard a broad range of questions from staff, many of which are addressed in current materials, including the University’s website and FAQ. As part of our role, we will continue to follow up on key areas where there are unanswered questions or where additional clarity will be important for informed decision‑making.

Some of the remaining questions we have—and have heard from members—include:

1. How do UPP environmental, social and governance (ESG) requirements compare to the UW ESG Principles and Guidelines and Responsible Investment Policy?
2. How will the University determine whether it is in the best interests of plan members to proceed, and how will the University gather and use staff input in this process?
3. How do the Waterloo RPP and UPP compare in terms of performance, funding, risk, management costs and overall value when assessed over consistent time periods?
4. How will UW ensure meaningful and proportionate representation for its members within UPP governance, particularly given UPP’s continued growth and UW’s potential scale within the plan?
5. How would a transition to UPP affect staff in practical terms, including contribution rates, mandatory enrollment, and impacts across different income levels and career stages?
6. What process, commitments, and agreements would need to be in place before moving from exploration to a member consent process, including the role of employee groups such as the UWSA?
7. What operational impacts would a transition have, including for current UW pension administration staff?
8. Peer institutions have provided supports such as one-time compensation adjustments to offset higher contribution rates and/or funding for employee groups to support independent research and consultation. Are similar supports being considered here?

If the process moves forward, pension plan members will make the decision. That's why it's important to stay informed and share your feedback along the way.

The UWSA President (Alyssa Kuron) and Chair of the Board (Sarah Landy) are actively engaged in the Pension Communications Advisory Group (PCAG) to ensure staff perspectives are reflected back to the University throughout this process. If you have any questions or concerns you would like to share with the UWSA, please reach out through our suggestion box or uwsa@uwaterloo.ca.

There is a growing amount of information available to help you better understand both the current plan and UPP. We encourage members to explore a range of internal and external sources and perspectives to support their own informed decision‑making.

If you are interested in learning more, the following resources may be helpful:

• Waterloo’s UPP website, including an overview of the exploration, plan comparisons, FAQ, and updates as new information becomes available – there's also a form to submit questions and concerns
• UW’s Pension and Benefits Committee (P&B) materials, including actuarial valuations and plan information going back several years
• UPP’s website and 2025 annual report
• UW Retirees Association (UWRA) WatTimes newsletter from fall 2025 with an opinion piece related to UPP