I have been offered a job with a hospital and the offer says it is mandatory that I participate in/contribute to the Hospitals of Ontario Pension Plan (HOOPP). I have a lot of debt and I have a lot of tax credits such that having cash to pay off that debt and make my own savings/investments right now seems the best thing to do for the next year or two. If my wages are being garnished into the pension plan then I am loosing a lot of that. The Hospital is saying I have no choice. Is that really true? Surely I can't be forced to pay into a pension plan? I asked my sister who is a lawyer but she has no clue. Anyone here know or know who I can ask? I also want to make sure the hospital doesn't do my tax deductions and rather pays me in full and lets me do my own tax payments, can I do that as well?
|
|
|
Legal question for Hospital job offer
- Thread starter palmpalm
- Start date
Tax will be deducted - no avoiding that.
As for the pension.........if the Hospital says: "you have no choice", I'd assume that to mean: "you have no choice".
However - as difficult as it may seem 'now', try and think of your future. I have no idea how old you are, but life passes by quickly. You may be able to retire several yrs earlier than you think because of the 'pension plan'. I'd be willing to bet that the employer contributes a percentage of what you're paying into it too. That's even better (down the road). Try not to focus on "today" too much regarding the pension payments. You'll definitly thank yourself 25 yrs from now.
You claim you have "a lot of debt". You also claim you can "make your own savings / investment plans". I beg to differ, as it hasn't been working very well for you so far.
Letting someone else control it would seem to be in your best interest. Not the easiest thing to wrap your head around, but think about it!!
Thanks but the debt is from school. I already have investments and am doing quite well with them. I have an RRSP and a TFSA and have a close relationship with some RBC investment banking people. I have been a student for 7 years and OSAP adds up. Also, I am fine with a pension plan, just don't want to contribute for a year or two. It is in my best interests RIGHT NOW to pay off my debt, not to contribute to the pension. In a year or two then, yes, contributing to the pension is a good thing.
Drop your TFSA money on your OSAP. You can top that up anytime.
If you really want the OSAP to disappear, reach into the RRSP money you have. Don't look back!!
If it's part of the employment contract that you sign, then there's no negotiation. Full plan text here.
However, you're missing out quite a bit since your employer contributes 126% of what you put in (i.e. your "return on investment" is 126%)... plus there's the compounding aspect to it if (an extra 2 years of service into the pension plan is huge... allows you to retire 2 years sooner).
Most defined benefit plans allow for you to get back your contribution if you quit within 2 years (vesting period)... however, you don't get the employer portion of the contribution (you get back what you put it, plus a negligible amount of interest).
Short-sighted thinking doesn't serve you well in this case.
However, you're missing out quite a bit since your employer contributes 126% of what you put in (i.e. your "return on investment" is 126%)... plus there's the compounding aspect to it if (an extra 2 years of service into the pension plan is huge... allows you to retire 2 years sooner).
Most defined benefit plans allow for you to get back your contribution if you quit within 2 years (vesting period)... however, you don't get the employer portion of the contribution (you get back what you put it, plus a negligible amount of interest).
Short-sighted thinking doesn't serve you well in this case.
Last edited:
Hmmm.. Interesting. Okay, I'll ask my investment buddies what they think of that. Thanks.
Thanks.
You may want out of it now, but in a year or 2 you want back in ?
How is that fair to those that are already paying into it, and you want to reap the benefits the same as them.
Your young, and i find ALOT of young people want the big bucks now. Understandable. However, later in life things like pensions, and having a great benefit plan even one that extends beyond retirement is great.
How is that fair to those that are already paying into it, and you want to reap the benefits the same as them.
Your young, and i find ALOT of young people want the big bucks now. Understandable. However, later in life things like pensions, and having a great benefit plan even one that extends beyond retirement is great.
sdrutledge
Active member
It's likely the Hospital will also contribute for you - after a couple years you may have invested a couple thousand, but the hospital will likely double that. If you leave that job you'll have a nice chunk of $$ to invest elsewhere.
THIS makes it a no-brainer. Even if not required, you should contribute.
+1
Its there offer.......they can offer you anything they want. In this case the pension is policy. Your contributions are used for investing as well as paying current retirees.
Teachers, Firemen, Police and Govt employyes have similar pension plans.....the employee contributes about. 10% and the employer matches that.
OpenGambit
Banned
You can only do this under very limited circumstances, essentially you have so many tax credits that there is no reason to deduct because you won't owe any tax.
You put an E on your form instead of calculating it, but the govt can tell you to piss off.
And seriously, if you think paying off OSAP is a priority, you need to get better investment buddies, since its the last debt that should be paid off.
+1 exactly!
suzuki2000
Well-known member
don't look to opt out of the HOOPP program, very few pension programs are better or even comparable
as said above, The HOOP is a great pension pkg, and student debt while "debt" is a pay last. Do not touch an RRSP to pay out OSAP. Your RBC investment buddies must know the guy I had from RBC. Take note of the word had.
It's great to pay off debts but they are also part of life. If they are justified debts (Home mortgage, student loan, business etc) take them in stride, especially if your employer is throwing money at you. Focus on your net worth five years down the road, not tomorrow.
|
|
|
|
|