The amount you and your employer contribute to the NHRIPP is based on how much you earn and the contribution rates in the applicable collective agreement. Employers can contribute at a higher rate than members, but not at a lower rate.
Contributions to the Plan are calculated on your earnings before tax. You pay no income tax on your contributions or the contributions that the employer makes on your behalf.
Let’s use an example. If you earn $20 an hour and work 70 hours in a two-week pay period, your earnings are $1,400. If the collective agreement states that the NHRIPP contribution rate is 4% for members and 4% for employers, then contributions are:
Member contributions: $1,400 x 4% = $56
Employer contributions: $1,400 x 4% = $56
The actual monthly pension you receive may be adjusted up or down depending on which pension payment option you choose and whether you retire before age 65. We explain pension payment options here.
If your employer stops contributing to the NHRIPP before having made contributions for 15 years, your pension benefits may be adjusted. This means that pensions for all current and former employees (including pensioners) of that employer may be reduced. Please contact InBenefits for more information.
It’s also important to remember that the NHRIPP is a target benefit pension plan. This means that pension benefits may increase or decrease depending on the financial health of the Plan.
Once a year, you will receive a detailed pension statement. This statement will show the contributions received on your behalf, and the amount of pension you have accrued to the date of the statement. Please check your statement carefully to make sure your information is correct and complete. If it is not, please contact InBenefits immediately.
Your monthly pension in the NHRIPP is made up of two parts. Any past service pension you may have and your current service pension.
Past service pension + Current service pension
It’s a monthly amount that’s added to your regular pension based on the number of years you worked for your employer before it started contributing to the Plan.
- If your employer started contributing to the NHRIPP on or before June 1, 2016, you can receive a past service pension of $26.60 per month for each year of service you had with your first employer before it made its first contribution. You can qualify for up to seven years of past service pension once you participate in the Plan for 24 continuous months or reach age 65.
- If your employer started contributing to the NHRIPP after June 1, 2016, you will qualify for up to two years of past service pension once you participate in the Plan for 24 continuous months or reach age 65. You will then qualify for another year of past service pension for each additional year you participate in the Plan for up to five additional Each year of past service provides an additional $26.60 per month of pension.
If you started working for the employer after it began contributing to the Plan, you are not eligible for a past service pension.
You start earning a current service pension when you and your employer start contributing to the NHRIPP on your behalf. Your current service pension is based on a formula. The current formula is $1.55 of monthly pension for every $100 in contributions received on your behalf. The Trustees may change this formula from time to time, based on the financial health of the Plan.
The 50% rule
When you retire or leave the Plan, we will check to see if your contributions with interest are worth more than 50% of the value of your pension. If they are, you can receive the excess amount as a taxable, lump sum or use it to increase your pension.