Contributions and plan funding
You and the Plan Sponsor (the Government of Ontario) share the cost of funding your PJPP pension. Contributions to the plan are remitted according to a clearly defined funding structure.
There are three components that together form the structure of the PJPP. This enables maximum tax-effectiveness on the amount you are required to contribute to the plan today, while maximizing the opportunity for you to reduce the combined taxes payable by you and your spouse on future benefits you may be eligible to receive from the plan when you retire.
The Provincial Judges Pension Plan
When you retire, your pension is equal to the sum of benefits of the plan paid as one pension amount monthly for your lifetime.
Your contributions
You contribute 7% of your full salary to the PJPP. Contributions are made to the PJPP until you:
- turn age 70,
- meet the Basic Service Requirement, or
- begin serving part-time.
Although the Income Tax Act (ITA) limits the amount of tax-deductible contributions you can make to a RPP each year, you are required to make contributions to the PJPP based on your full salary. The amount of your contribution that cannot be contributed to the RPP is contributed to the RCA and matched by the government to ensure that it remains a deductible contribution for you. By combining the RPP and RCA programs to fund your pension, the plan maximizes the deductibility of member contributions.
All member contributions are held in Trust, and your contributions are remitted as follows:
- Contributions up to the ITA annual contribution limit are remitted to the RPP trust fund
- Contributions in excess of the ITA annual contribution limit are remitted to the RCA trust fund and are also fully tax-deductible
| Contribution | Amount | Component |
|---|---|---|
| 7% of Judge’s 2023 full salary | $25,225.76 | |
| 2023 ITA contribution limit (the maximum that a member can contribute to the RPP) This is the maximum amount that can be contributed to the RPP component of the plan |
$22,672.00 | Registered Pension Plan (RPP) trust fund |
| 2023 RCA member contribution; tax-deductible This is 7% of full salary, minus ITA contribution limit |
$2,553.76 | Retirement Compensation Arrangement (RCA) trust fund |
| Total 2023 member contributions | $25,225.76 | RCA + RPP |
You do not make contributions to the SUP.
Contribution example: How contributions work
Based on an annual salary of $360,368 and the PJPP contribution rate of 7% of your full salary, your annual contributions to the PJPP as a provincial judge would have a total value of $25,226.
Plan Sponsor contributions
Each component of the PJPP is funded according to the recommendations of the plan actuary.
This funding structure enables member pension contributions to be fully tax deductible under the rules of the Income Tax Act (ITA), and allows for income splitting of the pension income paid from the RPP and RCA in retirement.
The Provincial Judges Pension Board is the Trustee of the RPP and RCA funds.
| Registered Pension Fund (RPP) | Retirement Compensation (RCA) | Supplemental Pension Plan (SUP) |
|---|---|---|
| Purpose: Pays a pension within the Income Tax Act (ITA) limits. | Purpose: Pays a retirement benefit according to a set formula: 2% of final three-year salary multiplied by years of credited service – minus the amount paid from the RPP. |
Purpose: Pays retirement benefits based on the plan provisions, minus amounts paid from the RPP and the RCA. |
| Funds are made up of member contributions up to the ITA maximum, sponsor contributions, and investment returns. The funds are held in trust by the PJPB and invested in a manner similar to a traditional defined benefit pension plan. |
Funds are made up of member contributions in excess of the ITA maximum, sponsor contributions, and investment returns. Funds are held in the RCA Trust so that benefits from the RCA remain partially funded (a requirement of the federal ITA); funds are invested in a manner similar to the RPP assets. |
Funds are made up of sponsor contributions and interest credited by the Government of Ontario. Funds are not held in trust. Rather, they are included as an employee future benefit liability within the consolidated revenue fund of the Province. |
Pension adjustments
Your membership in the plan (regardless of whether you are making contributions or not) will result in a pension adjustment (PA).
A PA applies to pensions accrued under an RPP. It is an estimate of the value of an individual’s accrued pension benefit in the year, and is the value assigned by Canada Revenue Agency (CRA). Your PA is reported on your annual T4 slip for income tax purposes and serves to reduce your registered retirement savings plan (RRSP) contribution room for that year.
However, you will no longer receive a PA after you turn age 71 as you will not be eligible to accrue benefits under the RPP component of the PJPP. Should you continue to serve full-time after attaining age 71, you will continue to accrue benefits under the RCA and SUP components of the plan.