HOOPP and an RRSP can both form part of your retirement savings, but they are not the same type of arrangement. The confusion often starts because contributions to either can provide tax advantages and both fall within Canada’s registered retirement system.
- What Kind of Pension Is HOOPP?
- HOOPP vs. RRSP
- HOOPP Contributions Are Not RRSP Contributions
- HOOPP Still Affects How Much RRSP Room You Get
- You Can Have HOOPP and an RRSP at the Same Time
- You Cannot Withdraw From HOOPP the Way You Can From an RRSP
- HOOPP Also Provides Benefits an RRSP Does Not Automatically Provide
- Other Questions About HOOPP and RRSPs
HOOPP is not an RRSP. It is a registered defined benefit workplace pension plan. Your HOOPP retirement income is determined using a pension formula based on factors including your earnings and years of contributory service. An RRSP is an individual registered savings plan in which you generally choose the investments and build your own account balance.
What Kind of Pension Is HOOPP?
The Healthcare of Ontario Pension Plan (HOOPP) is a defined benefit (DB) pension plan for eligible employees of participating Ontario healthcare employers. Under a defined benefit arrangement, the retirement benefit is determined by the pension formula rather than simply by the amount accumulated in an individual investment account. HOOPP’s explanation of its defined benefit pension
HOOPP’s formula considers your average annualized earnings, contributory service and the applicable average Year’s Maximum Pensionable Earnings (YMPE). Your retirement age can also affect the pension you receive. We break down those mechanics separately in how a HOOPP pension is calculated.
That structure also explains why the money deducted from your pay should not be treated as your personal HOOPP account balance. Member and employer contributions go into the HOOPP Fund, while your promised retirement benefit comes from the plan formula. HOOPP’s pension and contribution structure
HOOPP vs. RRSP
The differences are easier to see side by side.
| Feature | HOOPP | RRSP |
|---|---|---|
| Type | Defined benefit workplace pension | Individual registered retirement savings plan |
| How you join | Through an eligible HOOPP employer | You open an account with an eligible financial institution |
| Employer contributions | Yes | Not normally part of a personal RRSP |
| Investments | Managed by HOOPP | Generally selected by you or managed on your behalf |
| Retirement value | Determined under a pension formula | Depends on the assets accumulated in the account |
| Lifetime pension | Yes | An RRSP itself does not promise a lifetime pension |
| Regular withdrawals while working | No ordinary account withdrawals | Withdrawals generally permitted, subject to tax and applicable rules |
| Effect on RRSP room | HOOPP pension accrual produces a pension adjustment | RRSP contributions use available RRSP room |
The fundamental difference is who carries the responsibility for turning retirement savings into income. With an RRSP, the value available to you depends on what has accumulated in your account. HOOPP instead promises a pension under its defined benefit rules and pays that pension for life. HOOPP pension basics
For a broader explanation of the workplace plan before comparing individual features, what HOOPP is and how it works covers its overall structure.
HOOPP Contributions Are Not RRSP Contributions
Money deducted from your pay for HOOPP does not get deposited into your personal RRSP. It is a pension contribution made under the workplace plan.
For 2026, HOOPP members contribute 6.9% of annualized pensionable earnings up to the YMPE and 9.2% above the YMPE. Employers contribute $1.26 for every $1 contributed by members. Those rates have remained unchanged since 2004 and are scheduled to remain unchanged through at least the end of 2028. HOOPP’s 2026 contribution-rate announcement
The calculation is covered more closely in HOOPP contribution rates. What matters for this comparison is that those deductions buy pension benefits under HOOPP’s rules. They do not use the RRSP contribution room displayed on your CRA account as ordinary RRSP deposits would.
HOOPP Still Affects How Much RRSP Room You Get
Being in HOOPP does not prevent you from having an RRSP. However, participating in the pension affects the amount of new RRSP deduction room you generate.
A pension adjustment (PA) reflects the value of pension benefits earned through an employer pension arrangement during the year. The amount is reported on your tax slip and generally reduces your RRSP deduction limit for the following year. how pension adjustments affect RRSP limits
The PA is not simply the amount you personally contributed to HOOPP. For a defined benefit pension, tax rules determine the value used for the pension adjustment. HOOPP specifically notes that the PA differs from both your contributions and the amount of lifetime pension you have earned. HOOPP’s explanation of RRSP room and pension adjustments
This matters when deciding how much to put into an RRSP. Your actual available room should come from your current CRA information rather than an assumption that you automatically receive 18% of your previous year’s earnings on top of your HOOPP pension. The federal RRSP deduction-limit calculation incorporates the pension adjustment when determining new room.
You Can Have HOOPP and an RRSP at the Same Time
There is no rule requiring a HOOPP member to choose one or the other. If you have available RRSP contribution room, you can contribute to an RRSP while continuing to participate in HOOPP.
The two can therefore serve different purposes within the same retirement plan. HOOPP provides the defined benefit earned through your employment, while an RRSP lets you accumulate additional retirement assets within the contribution room available to you.
The difference becomes particularly important when comparing HOOPP with other workplace pensions. For example, HOOPP versus OMERS compares two defined benefit pension plans, which is a fundamentally different comparison from HOOPP versus an individually owned RRSP.
You Cannot Withdraw From HOOPP the Way You Can From an RRSP
An RRSP owner can generally make a withdrawal from the account, although the amount withdrawn is normally taxable and the financial institution generally withholds tax. HOOPP does not provide that kind of routine access to your pension while you are an active member.
Leaving all HOOPP employers can create transfer options depending on your circumstances, but transferring a pension benefit is not the same as making an ordinary RRSP withdrawal. An eligible departing member may, for example, be able to transfer a commuted value into a locked-in retirement arrangement rather than receive freely spendable money.
That issue deserves separate treatment because the options depend on factors such as age and employment status. Cashing out or withdrawing from a HOOPP pension early explains the transfer rules without confusing them with RRSP withdrawals.
HOOPP Also Provides Benefits an RRSP Does Not Automatically Provide
A personal RRSP is primarily a registered account for holding retirement savings and investments. Features such as a guaranteed formula-based lifetime pension do not automatically come with the account.
HOOPP’s pension can include survivor benefits, early-retirement provisions and inflation protection under the plan’s rules. Retired and deferred pensions can receive approved cost-of-living adjustments, for example. The treatment of those increases is covered in HOOPP COLA and inflation protection. HOOPP’s current inflation-protection provisions
Those additional provisions are another reason HOOPP should not be evaluated by asking how much money is “in the account.” There is no personal HOOPP account balance equivalent to the market value displayed inside an RRSP.
Other Questions About HOOPP and RRSPs
Do HOOPP contributions reduce your taxable income?
Member contributions to HOOPP reduce taxable income. They are reported through your employer’s tax reporting rather than treated as personal RRSP contributions.
Does your HOOPP pension adjustment count as taxable income?
A pension adjustment is not income. It is reported on line 20600 and is used in calculating your subsequent RRSP deduction limit.
Can buying back HOOPP service affect your RRSP room?
It can. A past service pension adjustment (PSPA) may arise when eligible past service is added to the pension, which can reduce available RRSP room. The rules are relevant when considering a HOOPP service buyback.
Does having HOOPP mean you do not need an RRSP?
HOOPP membership does not prevent you from using an RRSP, and the two arrangements perform different functions. Whether additional RRSP saving makes sense depends on your available contribution room and your own retirement finances rather than HOOPP membership alone.
