Why a JSPP?

Understanding the JSPP model

A multi-employer jointly sponsored pension plan or "JSPP", like the proposed UPP, is a contributory Defined Benefit pension plan. This means pension amounts are based on a formula using earnings and service. The UPP would be jointly sponsored, meaning the participating universities and pension plan members share responsibility for the plan's governance and funding.

There are a number of key differentiators of the multi-employer JSPP model. Unlike the current university pension plans – in which a single employer bears the full risks and costs of funding shortfalls, and members have little or no say in plan decisions – in a multi-employer JSPP, plan governance, costs and risks are shared equally between employers and members. Both are also jointly responsible for oversight of the plan, including decisions about the terms and conditions of the plan, amendments, investment policy and appointing a plan administrator.

JSPPs as a model for pension plan governance are not new – some of the largest pension plans in the province are JSPPs, including the Ontario Teachers’ Pension Plan (Teachers’), Ontario Municipal Employees’ Retirement System (OMERS), Healthcare of Ontario Pension Plan (HOOPP) and OPSEU Pension Trust (OPTrust). These plans have a long history, and are internationally respected for their ability to provide secure, high-quality pensions.

The most recent comprehensive review of pension plans and their regulation in Ontario, conducted by Professor Harry Arthurs in 2008, highlighted the potential role for new JSPPs in Ontario. The provincial government responded by issuing draft regulations governing the conversion of existing Defined Benefit pension plans to JSPPs.


University pension plans across Ontario face significant financial and political pressures that highlight the need for a new approach to protect pensions for the future. Here’s why:

  • Years of low interest rates and volatile investment markets have led to funding shortfalls and climbing contribution rates for most university pension plans in Ontario. Together with rising life expectancy, the resulting higher plan costs make it increasingly difficult to meet pension funding needs.
  • Ontario’s pension funding rules are a significant financial burden for universities, but are designed for single employer plans that are vulnerable to bankruptcy and plan wind-up. The financial pressures on universities have sometimes led to budget cuts, and a direct impact on academic programs and employment levels.

With rising costs and risks, single employer Defined Benefit pension plans – including those in the public sector – are being closely scrutinized. Proactively addressing some of these issues will give us more control over our pensions in the future.

The Ontario Government and stakeholders at the three universities broadly support the move to a JSPP and are committed to working together. Longer-term, the goal is to develop a sector-wide plan - one that is open to any other Ontario university.

UPP Advantages & Value

The UPP offers the following key advantages:

  • Joint governance, where university administrations, and the unions and faculty associations that represent plan members, have an equal say in plan design, funding and administration.
  • Greater transparency into plan operations, funding, and decision-making through joint governance and open information-sharing.
  • Clear and explicit sharing of risk between employers and plan members.
  • More stable and predictable contributions from employers and plan members.
  • Relief from some of the financial pressures on universities caused by Ontario’s current pension funding rules.
  • Efficiencies and economies of scale – a much larger plan means greater efficiency in plan administration and access to higher-return investment opportunities, which, in turn, will help address increasing costs.


The current phase of discussions started in May 2017 and has progressed to an agreement among the administrations, Steelworkers locals, faculty associations and non-represented employees at the University of Toronto, the University of Guelph, and Queen’s University. This agreement sets out a clear goal: to develop an approach that is fair and equitable to pension stakeholders at all three institutions.

Accrued pensions are protected. All pensions earned to the date of conversion would be transferred to the new JSPP, and there will be no negative impact on pension benefits earned before the new plan’s inception date.

To that end, a key underlying principle is that each university would be responsible for funding its pension plan deficit at the time of conversion, for a set transition period. With these deficit payments, the pensions transferred into the UPP would be fully funded at inception. Future gains and losses in the pension fund related to benefits earned after the inception of the UPP (and after the transition period) would be managed jointly by the UPP ’s Board of Trustees, with equal representation by employers and employees, and future contributions and benefits would be calculated on the same terms across all three universities.

There will also be no negative impact on the monthly pensions of retirees already drawing pensions on the date of changeover. Retirees will continue to receive their pensions as usual, but payments will come from the new UPP.

Creating the UPP, including conversion of the existing plans, will be overseen by the provincial pension regulator, the Financial Services Commission of Ontario. The conversion requires a formal consent process – including active, inactive and retired members and beneficiaries – as set out in provincial statutes and regulations. More details on the consent process will be posted to this website in the months ahead.

Supporting Mergers and Conversions
On Thursday November 15, 2018, the Ontario Minister of Finance, the Honourable Victor Fedeli released A Plan for the People: Ontario Economic Outlook and Fiscal Review (the Fall Economic Statement). The full Fall Economic Statement can be found here and it contains the following positive statements regarding a JSPP for the university sector:

 As the population ages and more people retire, it is more important than ever to look at making pensions more efficient. Broader public‐sector employers have been working towards the conversion of their single‐employer pension plans to jointly sponsored pension plans (JSPPs). There are several mergers into JSPPs currently under way to reduce costs and improve efficiencies, including a number in the hospital, municipal and university sectors. Several universities are working to merge their individual plans into a single JSPP which will be available to the university sector.

The government is committed to improving the pension system for the university sector. A new JSPP is a means of obtaining efficiencies of scale, improved investment opportunities and savings in plan administration. The new JSPP would allow universities to focus on their core mandate of providing high‐quality education for students rather than diverting resources to managing their single‐employer pension plans.

Based on the shared risk structure between plan members and employers, it is expected that this newly established plan would be treated similarly to other broader public‐sector, solvency‐exempt JSPPs following a successful conversion and a request from the newly established university plan.