HOOPP for incorporated Ontario physicians

What is the Healthcare of Ontario Pension Plan (HOOPP)

With over $100 billion in net assets, HOOPP is a defined benefits plan that is commonly available to those that work in the healthcare sector, including nurses, medical technicians, food services, and housekeeping staff.

HOOPP is based on a pre-determined formula, and can be counted on as a source of consistent and reliable income during retirement years. As a member you can start receiving pension income as early as age 55, or delay it to as late as age 71. HOOPP also provides cost of living adjustments to protect retirement income against inflation. Eligible pension income can also be 50% income split with a spouse or common-law partner potentially lowering taxable income, and HOOPP also offers survivor benefits.

 

What changed when, and who does it impact

Effective in January 2025, HOOPP allows for incorporated physicians who run their own practices through a medical clinic or hospital to enroll in HOOPP.

The Medicine Professional Corporation (MPC) owned by incorporated physicians become a HOOPP employer, and employees of the corporation become eligible to become members of the plan. Contributions to the HOOPP are made through an employee portion (plan member) and an employer portion (MPC). The employee portion is a tax-deductible contribution to the employee, and the employer portion is a tax deduction to the MPC.

 

How is HOOPP for physicians calculated

Where:

  • Average earnings: given by your average best five consecutive years of contributing to the plan.
  • Years of service: years you contributed to the plan.
  • Year’s maximum pensionable earnings (YMPE): Set by the federal government every year, this sets the salary amount to contribute the maximum amount to the Canada Pension Plan (CPP) every year. In 2025, this amount is $71,300.
  • Plan member contribution: Physician plan members contribute per calendar year 6.9% up to the YMPE amount, and 9.2% of the amount above YMPE. This amount is tax deductible against personal T4 salaried income and remitted to HOOPP monthly.
  • Employer contribution: The employer contribution amount is 126% of the total plan member contribution. This amount is tax deductible to the MPC and remitted to HOOPP monthly.

 

HOOPP requires you to set a initial Baseline Earning

  • Baseline earnings: Set through the MPC’s participation agreement with HOOPP, baseline earnings can be up to the total T4 salaried income that the incorporated physician expects to earn in a calendar year. For example, if you are paid a T4 salary of $200,000 from the MPC, you may still set baseline earnings of $150,000 but not an amount over $200,000.
  • Upper and lower limits: Every year, you can increase or decrease your contributions by amount equal to the previous year’s CPI and 1%. For example, if the CPI was 2.10%, your upper limit is 3.10% above your previous year’s baseline earnings and the lower limit is 3.10% below it. Consistently increasing your baseline earnings will increase your average earnings and eventual pension benefit.
  • Earning reduction: If your practice has a reduction in earnings below the lower limit, the service for that year will be proportionally reduced.

 

What does this mean to you?

As a physician there is some additional flexibility to save through the following account structures for retirement purposes:

  1. HOOPP
  2. Registered Savings Plan (RSP)
  3. Tax-Free Savings Account
  4. Non-registered Accounts
  5. Corporation

Each has its distinct advantages and drawbacks and many physicians will accumulate funds through a combination of the various structures in their career.

 

Questions to consider…

  • When is your target retirement date?
  • How many “years of service” will you have before the retirement date?
  • How important is liquidity? Do you prefer to have lump sum cash, or know that there is a continuous income stream waiting for you at retirement?
  • How are you currently taking income from your MPC – salary, dividends, or a blend of both? Do you work with your tax professional to optimize your income to match your lifestyle?
  • Do you use your corporation or related corporations to invest in financial securities or in real estate?
  • If you have more assets then what you need through your retirement years, whom do you want to receive the surplus?


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If you are wondering if becoming a HOOPP member is suitable for your situation or have additional questions, we are here to help!