Frequently Asked Questions

Pension benefits

Is my pension guaranteed?

The Musicians’ Pension Fund of Canada has been in existence since April 1962, and is required to comply with the Ontario Pension Benefits Act (the OPBA). This legislation includes several protections for plan members, including:

  • a requirement that the assets of the plan be held in a trust fund which is used exclusively for the benefit of members and their beneficiaries
  • a requirement to remit employer contributions to the fund within 30 days of the end of the month for which they are due
  • rules surrounding the investment of the plan’s assets, to ensure that they are well diversified
  • a requirement to review the fund regularly (at least every three years) to ensure that the assets are sufficient to meet the plan’s obligations to pay benefits — for more information about this review, which is conducted by a qualified actuary, please see question 2.

Under the Ontario Pension Benefits Act (the OPBA), our plan is considered a multi-employer pension plan (MEPP). In this type of plan, employers make contributions based on rates negotiated through unions. Since employer contributions are fixed by negotiations (and cannot be varied simply because plan assets become insufficient to pay promised benefits), it is possible that the plan may have to be changed to reduce benefits already earned and even pensions that are currently being paid.

Also, because our plan is a multi-employer pension plan (MEPP), it is not covered by the Ontario Pension Benefits Guarantee Fund. (This is a fund, to which employers of single-employer pension plans contribute, that guarantees certain pension benefits in the event of bankruptcy, where the pension fund has insufficient assets to pay promised benefits.)

If you would like to read more about the Ontario Pension Benefits Act (OPBA), here is a link to an informative brochure issued by the Financial Services Commission of Ontario (FSCO), entitled “A Guide to Understanding Your Pension Plan”.

The Financial Services Commission of Ontario (FSCO) is the “administrator” of the Ontario Pension Benefits Act (OPBA). They are responsible for the regulation of pension plans (like ours) which are registered under the Ontario Pension Benefits Act (OPBA).

What happens if I retire after age 65?

You can choose to commence your pension at any age up to the December 1 of the year you turn age 71. If you are still working, you will continue to accrue pension benefits (as described in question 5) based on contributions made on your behalf during that time. If you continue in covered employment , your pension benefit cannot be less than the actuarial equivalent of your pension earned to age 65. For an explanation of “actuarial equivalent”, please check the Glossary at the Plan Summary.

What happens if I retire before age 65?

In this case, your pension will be a monthly amount calculated the same way as a normal pension. However, because you will be receiving your pension sooner and over a longer period of time, the monthly amount you will receive is reduced. The reduction factor is based on your age (years and months) at retirement.

Please check the Plan Summary, for more information about what happens if you retire early.

How much will my pension be?

Please note that, for many purposes, your pension is divided into three parts. Throughout this FAQ, we will refer frequently to your Part 1, Part 2 and Part 3 benefits.

Part 1 relates to your pension benefits in respect of contributions for engagements taking place up to December 31, 2010.

Part 2 relates to your pension benefits in respect of contributions for engagements taking place from January 1, 2011 up to and including December 31, 2012.

Part 3 relates to your pension benefits in respect of contributions for engagements taking place on and after January 1, 2013. Your monthly pension is based on the following formula:

Contribution type and timing Monthly pension for each $100 of contributions
Part 1
Contributions for covered employment prior to 1992: $3.80
Contributions for covered employment from
January 1, 1992 up to and including April 30, 2006:
$3.70
Contributions for covered employment from
May 1, 2006 up to and including December 31, 2010:
Contributions up to 10% of scale wages:
$3.70
   Contributions between 10% and 12%
of scale wages:
$2.00
Part 2
Contributions for covered employment from $3.80
Contributions for covered employment from
January 1, 2011 up to and including December 31, 2012:
Contributions up to 10% of scale wages:
$3.25
   Contributions between 10% and 12%
of scale wages:
$2.00
Part 3
Contributions for covered employment on and after
January 1, 2013*:
$3.25

* Note that contributions for this period are divided into two equal amounts to be applied as follows:

  • 50% of the contributions are allocated as regular contributions to be used for calculating your benefits, and
  • 50% of the contributions are allocated as sustaining contributions that will help support the actual cost of your benefits and will not be used for calculating benefits.

Contributions for covered employment on and after January 1, 2013 cannot exceed 18% of scale.

The calculation above determines your monthly pension payable for your lifetime starting at age 65. There are other benefits “attached” to your pension, including survivor benefits and early retirement benefits.

For more information on how your pension is calculated, including examples, please see the Plan Summary.

Is my pension indexed after retirement?

An “indexed pension” is one that is increased periodically to reflect increases in the consumer price index (CPI). The consumer price index (CPI) is a measure of the degree of change in the price of goods and services purchased by Canadian consumers and is determined monthly by Statistics Canada.

Only about 32% of all defined benefit plans in Canada provide any form of guaranteed indexing after retirement. Most of them are public sector plans where funding comes, at least in part, from taxpayers.

The Board of Trustees regularly reviews the different types of benefits that the plan provides, and makes changes periodically based on what it believes is in the best interests of the members. Since very few (if any) multi-employer pension plans like ours provide guaranteed indexing, and since the cost is significant, the Trustees have not implemented guaranteed indexing as part of the menu of benefit provisions under the plan