Healthcare of Ontario Pension Plan (HOOPP) Is Here! What Every Ontario Physician Should Know
With Rachel Arbour, Head of Plan Benefits, Design and Policy at Healthcare of Ontario Pension Plan
Disclaimer: The information provided is for general informational purposes only and should not be considered as professional financial advice. Please consult with a financial advisor for advice specific to your situation.
For years, one of the most common things I heard from physicians when I asked what they'd change about their finances was simple: I wish I had a pension.
I actually put a survey out to about a hundred physicians, and when I asked what they'd change about their finances if they could press a magic button, the most common answer was a pension. Teachers have them. Nurses have them. But most incorporated physicians in Ontario have had to build their own version of retirement income from scratch. That's changed.
The Healthcare of Ontario Pension Plan - HOOPP - is now open to incorporated physicians in Ontario. I sat down with Rachel Arbour, Head of Plan Benefits Design and Policy at HOOPP, to walk through exactly how it works, who qualifies, and what the first steps look like.
In this episode:
What HOOPP is and how it works as a defined benefit pension
Why incorporated physicians can now join and what the MPC requirement means
How and when you can start collecting your pension
How HOOPP compares to building your own retirement income through an IPP, corporate investments, RRSPs, and TFSAs
The first steps to take if you want to explore joining
What Is HOOPP?
HOOPP is a defined benefit, multi-employer, jointly sponsored pension plan that has been providing pensions to Ontario healthcare workers since 1960, 65 years of paying out pensions. It has over 700 participating employers and more than 475,000 members, most of whom are nurses and other healthcare workers across Ontario.
It started as the Hospitals of Ontario Pension Plan and has expanded significantly over time as healthcare delivery has changed. And now, for the first time, incorporated physicians can join.
A defined benefit plan means your retirement income is based on a formula, one that takes into account your years of service in the plan, your earnings, and the age at which you start collecting. You can begin your pension anytime between age 55 and 71, and once it starts, it's paid to you for the rest of your life, no matter how long you live.
That guaranteed income for life is what makes this different from any other retirement savings option. As Rachel described it, she knows exactly what her monthly income will be in retirement and doesn't have to worry about investment returns.
Who Qualifies?
You need to have a Medical Professional Corporation (MPC). The reason is a tax law requirement: to join a pension plan in Canada, there has to be an employer-employee relationship. For incorporated physicians, that relationship exists between you and your MPC - your corporation becomes the participating employer, and you join as the member.
If you're already working directly for a HOOPP-participating employer like a hospital, you may already be in the plan. This new pathway is specifically for physicians operating through their own MPCs who were previously excluded.
HOOPP vs. Building Your Own Pension
Joining HOOPP isn't automatically the right move for every physician, it depends on your situation. As I mentioned in the episode, the analysis involves comparing HOOPP to other options like the Individual Pension Plan, self-pensioning through corporate investments, RRSPs, and TFSAs.
One thing that's unique to HOOPP and hard to put a number on is the peace of mind that comes with guaranteed income. The question of how to turn a pile of savings into a reliable income stream that lasts your whole life is one of the biggest challenges in retirement planning. With HOOPP, that question is taken off the table.
That said, it's part of an overall analysis, and the right starting point is figuring out how much you need in retirement and working backwards from there.
Common questions about HOOPP for physicians
Can incorporated physicians in Ontario join HOOPP?
Yes. Incorporated physicians in Ontario can now join HOOPP through their Medical Professional Corporation (MPC). The MPC becomes the participating employer, and the physician joins as a member. This is possible because pension plans in Canada require an employer-employee relationship, which exists between a physician and their MPC.
What is a defined benefit pension plan?
A defined benefit plan means your retirement income is based on a formula that takes into account your years of service in the plan, your earnings, and the age at which you start collecting. Unlike a defined contribution plan where you know what you are putting in but not what you will get out, with a defined benefit plan you can know ahead of time what your monthly pension will be.
When can I start collecting my HOOPP pension?
You can begin your HOOPP pension anytime between age 55 and 71. Once it starts, it is paid for the rest of your life. Different rules apply depending on whether you start before or after age 65.
What happens to my HOOPP pension if I pass away?
If you are single when you retire, HOOPP guarantees payment of your pension for 15 years after retirement. If you pass away during that period, the remaining payments go to your designated beneficiary. If you are married, your pension is guaranteed for a five-year period, after which your spouse receives 66 and two-thirds percent of your pension for the rest of their lifetime. You also have the option to increase the survivor benefit to 80 or 100 percent of your pension, with an adjustment to your own monthly amount. If you pass away before starting your pension, your beneficiary or spouse receives the commuted value of your pension.
Do I need T4 employment income from my corporation to join HOOPP?
Yes. Because joining a pension plan requires an employer-employee relationship under Canadian tax law, you need to be taking employment income from your MPC rather than dividends only. A physician who takes no employment income from their corporation would not be eligible to join HOOPP without rearranging how they take income from their corporation.
Is HOOPP the only retirement savings option for incorporated physicians?
No. HOOPP may form part of an overall plan. Other options available to incorporated physicians include the Individual Pension Plan, investing inside the corporation, RRSPs, and TFSAs. The right combination depends on your individual situation, retirement income goals, and how much employment income you take from your corporation.
How do I get started with HOOPP as an incorporated physician?
Visit hoopp.com and look for the physician section under Joining HOOPP. There is a dedicated guide for physicians, benefit illustrations, and a form to start the conversation with their team. Note that all HOOPP participating employers also need to be members of the Ontario Hospital Association, so there is a secondary step in the application process. Working with a financial planner before applying is recommended to understand how HOOPP fits into your overall retirement picture.
How to Get Started
Visit hoopp.com and look for the physician section under "Joining HOOPP." There's a dedicated guide for physicians, benefit illustrations, and a form to start the conversation with their team directly.
One thing to be aware of: all HOOPP-participating employers need to be members of the Ontario Hospital Association, so there's a secondary step there as part of the process.
Before going through the application, it's worth working through the analysis with a financial planner to see how HOOPP fits into your overall retirement picture. If you want to do that, book a free discovery call and we can work through it together.