If you work at most Ontario hospitals, a deduction called HOOPP appears on every pay stub. It's easy to ignore, but it may be the most valuable financial benefit of your nursing career.
What is HOOPP?
HOOPP is the Healthcare of Ontario Pension Plan. It's a defined benefit pension, which means your retirement income is based on a formula, not on how your investments perform. You know in advance roughly what you'll receive, and it's paid for life.
Both you and your employer contribute. Your employer contributes more than you do, which makes HOOPP a significant part of your total compensation.
How your pension is calculated
In general, a defined benefit pension like HOOPP is based on:
- Your years of credited service in the plan.
- Your highest average earnings over a set number of years.
- The plan's formula and your age when you retire.
That means two things matter most: how long you're in the plan, and your earnings in your highest-paid years. Your annual HOOPP statement shows your projected pension. Log in to your HOOPP account to see your own numbers.
Full-time vs part-time
Full-time employees usually join right away. Part-time and casual employees can often join too, and joining early in your career can make a big difference to your pension. Check HOOPP's eligibility rules or ask your HR department.
What HOOPP means for your RRSP
Because you're already saving through HOOPP, the CRA reduces your RRSP room by a pension adjustment each year. Many full-time hospital nurses have only a few thousand dollars of RRSP room. That's one reason a TFSA is often a great complement to HOOPP.
Should you stay in HOOPP?
For most nurses, yes. Defined benefit pensions are increasingly rare, and HOOPP gives you:
- A predictable lifetime income.
- Employer contributions you don't get if you're not in the plan.
- Protection from investment ups and downs, since the plan carries that risk.
Before you leave a HOOPP employer, for example for an agency or a travel contract, consider what you'd give up. Check whether your new employer also participates in HOOPP, since many Ontario healthcare employers do.
How HOOPP fits your overall plan
- Stay in HOOPP and know your projected pension.
- Add CPP and OAS to estimate your total retirement income.
- Use a TFSA for flexible savings and to fill any gap.
- Use leftover RRSP room in high-income years, like big overtime years.
The bottom line
HOOPP is a powerful benefit. Understanding it helps you make better decisions about your RRSP, TFSA, job changes and when to retire.
Want to see how premiums and overtime affect your pay? Try the free Nurse Shift Pay Calculator.
This article is for general education and isn't financial advice. HOOPP's rules and formula are set by the plan; confirm details with HOOPP or your employer.