As a Plan member, you receive a significant benefit from your employer who pays into LAPP on your behalf. Your employer matches your contributions and pays an extra 1%, throughout your employment.
The cost of that contribution is quite generous. Currently, the total contributions averages almost 13% of your annual salary every year. That is a cost that really adds up over time and it is a substantial workplace benefit at a time when most Canadians have no workplace pension at all.
One of the greatest values of your LAPP pension is that your employer is helping you to be secure in your retirement. Many Canadians will retire from their jobs with no retirement income beyond their government pension plans, Canada Pension Plan (CPP) and Old Age Security (OAS). Those government plans are estimated to provide only 25% to 30% of what people earned before retirement for those who have worked most of their lives in Canada.
If you have worked a full career in Canada with a LAPP employer, depending on the number of years you have contributed to the Plan, you could end up with a pension that provides as much as 70% of your pre-retirement income, including your CPP and OAS.
Each person’s pension will be different, depending on salary and years of services in the Plan, but all LAPP members end up with a much larger pension at retirement than they could pay for themselves because employers have made a 51% contribution on their behalf. At a time when most people have no workplace pension at all, employer contributions are a big part of why Your Plan has Value.