pensions
FAQ
What
is a pension plan?
A pension plan is a program by which you can save money while
you are working so you will have funds to live on when you retire.
As a member of the Ontario Teachers’ Pension Plan, your contributions
are matched by your employer.
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Why
is it important to contribute?
Plan membership is mandatory for all teaching certificate holders
working in the publicly funded schools of Ontario. Membership
has several advantages:
• the earlier you start contributing, the earlier you are eligible
for retirement;
• contributions to a pension plan are tax sheltered - you pay
the tax on your pension when your income is lower; and
• interest earned by the money in the plan is also tax sheltered.
Keep in mind that
• you usually don't get the money back until you retire;
• in a group pension, all contributions are pooled and invested
together; and
• this pool of money, plus interest earned, is called the pension
fund.
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What
kind of a pension plan is the Ontario Teachers’ Pension Plan (OTPP)?
The OTPP is a defined benefits plan. This means that your pension
is based on a formula: your years of service x your best five
years' salaries x 2%.
For your defined benefits plan, the Ontario Teachers’ Pension
Plan Board (OTPPB) must ensure that the pension fund can provide
the pension you have been promised. In the financial media, the
OTPP is called Teachers.
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Who
are the members of the Ontario Teachers’ Pension Plan?
The members of the pension plan are teachers, vice-principals,
principals, and supervisory officers working for school boards.
Other members of the plan include teachers on secondments, teachers
working on Federation staff, teachers working in other designated
educational institutions and teachers working for school boards
or designated employers in a non-teaching role.
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What
is special about the Ontario Teachers' Pension Plan?
The Ontario Teachers’ Pension Plan is a partnership between the
Ontario Teachers’ Federation (OTF) and the government of Ontario.
Before 1989, the Teachers’ Superannuation Fund was entirely under
the control of the government of Ontario. In 1989, it was set
up as a separate corporation. In 1991, a partnership was formed
between the government and OTF. The Ontario Teachers’ Pension
Plan was created by the Teachers’ Pension Act.
The terms of the partnership are that
• each partner names four people to serve on the Board of Directors
of the Ontario Teachers’ Pension Plan;
• the partners together name a ninth person to be the chairperson
of the board;
• the government and OTF name people to sit on a Partners’ Committee;
• the government and OTF, as partners, jointly share the risks;
• the government represents the employer in the partnership; and
• OTF represents the members of the plan.
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What
does it mean to share the risks and benefits of the plan?
Since the Ontario Teachers’ Pension Plan is a partnership between
teachers and the government, each partner shares both the good
and the bad. This means that, when the investments of the pension
fund do well and the plan has an actuarial surplus, the partners
negotiate how this surplus will be spent. If the investments do
poorly or if growing liabilities create a deficiency, the partners
must share the responsibility for making up the shortfall. Retired
members of the plan do not share this liability since their benefits
are protected by the Pension Benefits Act.
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What is the Ontario Teachers’
Pension Plan Board (OTPPB)?
The Ontario Teachers’ Pension Plan Board (OTPPB) is the administrative
organization that manages the plan and its pension fund on a daily
basis. The OTPPB is headed by a Chief Executive Officer who reports
to the Board of Directors of the OTPPB.
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How
does OTF name its representatives to the OTPPB?
The process for naming members to the board is defined by OTF
By-law XII. The by-law describes the qualifications required of
the directors.
One director must have
• general pension knowledge, and
• specific expertise in teachers’ interests.
One director must have
• general pension experience, and
• specific expertise in pension plan benefits and structure.
Two directors must have
• general pension experience, and
• specific expertise in pension finances.
Appointments are ratified by the OTF Board of Governors following
a recommendation from the OTF Executive.
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What
does the OTPPB do?
The OTPPB is responsible for the management of the pension fund
and its administration. The board makes decisions about the investment
strategies for the pension fund. These management strategies must
follow a legal obligation of fiduciary responsibility.
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How
has the creation of the OTPPB been beneficial to plan members?
The board has been very successful in managing the plan assets,
growing them from about $19 billion in 1991 to over $100 billion
today. The board has attracted a highly regarded management team
for the plan as well.
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What
is the Partners’ Committee?
The Partners’ Committee is the means by which the partners - OTF
and the government - meet to fulfill their responsibilities to
the pension plan. Each partner names three representatives to
the Partners’ Committee.
The teachers’ representatives are officers of OTF – the President,
the First Vice-President and the Past President. The teacher members
of the committee change yearly as new members take office.
The government names its own representatives to the Partners'
Committee. The role of the Partners' Committee is outlined in
the Partners' Agreement, which was signed by OTF and the government
of Ontario in 1992.
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What
does the Partners' Committee do?
The role of the Partners’ Committee includes
• designing the plan structure,
• setting the benefits of the plan,
• developing new policy,
• deciding the contribution rate,
• making changes to the plan or the Partners’ Agreement,
• deciding when the plan will be valued and when that valuation
will be filed with the appropriate authority, and
• officially naming people to the Board of Directors.
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What
is the OTF Pension Committee?
The OTF Pension Committee is comprised of staff officers. OTF
and its four affiliates - AEFO, ETFO, OECTA and OSSTF - each name
a representative to the committee. The Retired Teachers of Ontario
(RTO) also has a representative on the OTF Pension Committee.
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What
does the OTF Pension Committee do?
The OTF Pension Committee studies pension issues referred to it
by the OTF Executive. The members of the committee conduct research
and make recommendations concerning policy to the OTF Executive
and to the OTF members of the Partners’ Committee.
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What
is the Pension Negotiations Committee?
The Pension Negotiations Committee is different from the Pension
Committee. This group is chosen by the OTF Executive to negotiate
with the government partner.
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What
does the Pension Negotiations Committee do?
The OTF Pension Negotiations Committee meets with the government
Negotiations Committee to negotiate changes to the Ontario Teachers’
Pension Plan. The terms of these negotiations are defined by the
Partners’ Agreement. The negotiations usually take place every
three years.
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How
are my interests represented if I am not a member of OTF?
The OTF Pension Committee, the OTF Pension Negotiations Committee,
OTF members of the Partners’ Committee and the OTF Executive consults
non-OTF members of the plan over concerns. This consultation is
done on both a formal and an informal basis.
All communications regarding the pension plan are distributed
as broadly as possible to all members of the plan.
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What
if I have other questions?
You can contact OTF, your affiliate pension officer or the Ontario
Teachers’ Pension Plan Board by e-mail, telephone or regular mail.
OTF/FEO
Suite 200, 1300 Yonge Street
Toronto, ON, M4T 1X3
T: 416.966.3424 or 1.800.268.7061
Email: comments@otffeo.on.ca
Ontario Teachers’ Pension Plan
5650 Yonge Street
Toronto, ON, M2M 4H5
T: 416.226.2700 or 1.800.668.0105
Email: inquiry@otpp.com
Association des enseignantes et des
enseignants franco-ontariens
681 Belfast Road
Ottawa, ON, K1G 0Z4
T: 613.244.2336
Email: aefo@aefo.on.ca
Elementary Teachers' Federation of
Ontario
Suite 1000, 480 University Avenue
Toronto, ON, M5G 1V2
T: 416.962.3836 or 1.888.838.3836
Ontario English Catholic Teachers’
Federation
Suite 400, 65 St Clair Avenue East
Toronto, ON, M4T 2Y8
T: 416.925.7764 or 1.800.268.7230
Ontario Secondary School Teachers’
Federation
60 Mobile Drive
Toronto, ON, M4A 2P3
T: 416.751.8300 or 1.800.267.7867
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