New HOOPP Pension for Doctors? Overview from a CPA in Ottawa

If you're an incorporated physician in Ontario, you've likely heard about HOOPP now open to doctors through their Medical Professional Corporations (MPCs).

I wrote this article write away as soon as I heard the news because I started receiving questions about this, so bear with me in case things are confusing. It's brand new in the MPC industry.

Who Is Eligible?

To join HOOPP through your MPC, you must:

• Be incorporated under a Medical Professional Corporation
• Practice in Ontario
• Pay yourself a T4 salary (not dividends)
• Have your MPC become a member of the Ontario Hospital Association (OHA)

If you're the sole employee of your MPC, yes, you can still join HOOPP. If you have staff, you may need to offer HOOPP to them as well, more on that below.

How Contributions Work

HOOPP is a defined benefit plan, meaning your retirement income is based on a formula, not investment performance. A lot of private firms and companies offer DB plans to their employees.

Both you (as employee) and your MPC (as employer) contribute monthly:

• You contribute:
  • Between 6.9% and 9.2% on your salary
• Your MPC contributes:
  • 1.26x your contribution amount

Example (approximate, based on a $150,000 salary):

• Doctor’s contribution: ~$11,000/year
• Employer (MPC) contribution: ~$13,860/year
• Total into HOOPP: ~$24,860/year

What You Get

The pension you receive is calculated using:

• Your average salary over your best 5 consecutive years
• Years of service (how long you contributed)
• Your age at retirement

For each year you contribute, the formula adds:

• 1.5% to 2% of salary

So over 25 years at a $150,000 salary, you could expect a pension in the $65,000+/year range, indexed for inflation, and for life.

Tax Implications

• Your personal contributions are tax deductible
• Your corporate contributions are also deductible (just like wages)

This creates a tax-efficient way to pull money out of your corporation, while building a guaranteed income stream in retirement.

Key Considerations

1. You must pay yourself a salary (HOOPP doesn't work with dividends)
2. You may need to offer HOOPP to employees (especially if you have full-time staff)
3. Payroll must be run monthly (contributions are based on T4 income)
4. You can buy back past service (if you’ve previously earned salary from your MPC but weren’t in HOOPP, there may be an opportunity to purchase service and increase your future pension)

Is HOOPP Worth It?

If you're looking for predictable, tax-efficient retirement income, it can be. But it has to fit into your overall compensation and tax planning strategy. For example, some physicians may prefer to retain control over their investments via holding companies, RRSPs, rental properties, or investing in other practices.

For others, especially those planning long-term practice in Ontario and earning steady salary income, HOOPP offers a low-risk, high-value way to secure retirement income, with corporate tax advantages.

Conclusion

HOOPP can be a powerful retirement tool, but it needs to be implemented properly. That means setting up payroll, salary structuring, and corporate deductions the right way, ideally with guidance from a CPA who understands the medical industry.

As a CPA in Ottawa, I work with physicians across Ontario to handle:

• Corporate and personal tax returns
• Incorporation structuring
• Salary vs. dividend planning
• HOOPP implementation
• Coordination with your lawyer
• Holding companies, trusts, and income splitting

If you're a doctor considering HOOPP, I can walk you through the numbers based on your actual compensation model and retirement goals.

Need help running the numbers for your practice? Talk to a CPA in Ottawa.

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This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

hello@taxesmadesimple.ca

WhatsApp - 613.600.4194

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