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The basics of your pension

Ontario Teachers' is a defined benefit pension plan. This means your pension is defined by a formula that takes into account your average salary and credit.

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You automatically become a member of Ontario Teachers’ and begin to build credit when your employer deducts pension contributions from your pay.

Contributing to your pension

All eligible members must contribute to the Ontario Teachers' Pension Plan. As soon as you start teaching, your employer will deduct pension contributions from your pay. Contributions, which are sent to us, are matched dollar for dollar by the Ontario government and participating employers on behalf of all members. Contributions are tax deductible and will be reflected on your T4 slip.

While contributions are important, your pension is based on your years of credit (your actual time worked) and average salary, not the amount you contribute.

How much do you contribute?

You contribute a percentage of your salary to your future pension. To see what you contribute to the plan:

  • Check your pay stub or your T4 slip
  • Sign in to your account

Calculating your contributions

We use a two-tiered formula to calculate how much you contribute to your pension. It's divided between your annual salary up to the Canada Pension Plan (CPP) contributions and benefits limit, and your salary above the CPP limit.

For example, in 2021 you contribute:

  • 10.4% of your annual salary up to the CPP limit, plus
  • 12.0% of any salary above the CPP limit.

The CPP limit, which changes annually, is $61,600 in 2021.

Contributions are matched by the Ontario government and participating employers on behalf of all members.

How Ontario Teachers' and CPP work together

Contributions to Ontario Teachers' are lower on earnings up to the CPP limit and higher on earnings above it. We provide a bridge benefit, which is intended to supplement your retirement income until age 65 when you're eligible for an unreduced CPP pension. The month after you turn 65, or immediately if you start a CPP disability pension, the bridge benefit ends and your pension payment is adjusted.

Examples

If you're a teacher earning a salary of $78,000, you'll pay $8,374.40 in pension contributions in 2021.

Formula Contribution Amount
10.4% x $61,600 = $6,406.40
12.0% x $16,400 =
($78,000 - $61,600 = $16,400)
$1,968.00
Total: $8,374.40

If you're a teacher earning a salary of $65,000, you'll pay $6,814.40 in pension contributions in 2021. Almost all of your contributions will be made at the lower contribution rate.

Formula Contribution Amount
10.4% x $61,600 = $6,406.40
12.0% x $3,400 =
($65,000 - $61,600 = $3,400)
$408.00
Total: $6,814.40

How we calculate your pension

You qualify for an unreduced retirement pension when you reach your 85 factor (age + qualifying years = 85), or at age 65. This means we don't apply any reduction factors when calculating your basic annual pension.

However, once you reach age 65 OR begin collecting a disability pension from the Canada Pension Plan (CPP), your bridge benefit ends and your pension is adjusted based on:

Example

If you earn $85,000 in your five highest salary years and have 30 years of credit, your basic annual pension would be 2% × 30 × $85,000 = $51,000.

However, once you reach age 65 OR begin collecting a disability pension from the Canada Pension Plan (CPP), your pension is adjusted based on:

0.45%
(CPP adjustment factor applied the year you turn 65)
x
(years of service in Ontario Teachers' during which you also contributed to CPP)
x
YMPE average or best-five salary
(five-year average YMPE based on when you last contributed to Ontario Teachers' or your best-five average salary, whichever is lower)
=

Reduced retirement pension

You're eligible for a reduced pension when you're at least 50 years old. Your reduced pension is calculated just like a regular retirement pension, and then reduced by a 2.5% or 5% reduction formula.

How we measure service and credit

The length of your teaching career affects the amount of your pension and when you're eligible to receive it. We measure your plan membership in two ways:

  1. Credit
    This is the actual number of years, months, and days you've worked and contributed to the plan. We use this figure to calculate the amount of your pension.
  2. Qualifying years
    This is the number of school years in which you've taught for at least a portion of the year. Qualifying years determine when you're eligible for an unreduced retirement pension. Because of changes in the plan, there are different rules for measuring your qualifying years.

Measuring your qualifying years

For the school years Days of work needed for one qualifying year

after January 1, 1997

more than 10 days

September 1, 1990 to January 1, 1997

more than 20 days

before September 1,1990

any credit

Qualifying factor

Your age plus qualifying years is your qualifying factor. It's used to determine when you're eligible for an unreduced pension, and to calculate an early retirement reduction.

Example

Jane is eligible for an unreduced pension because her age plus qualifying years of service equal 85:

 
53
years of age
+
32
=