If your contributions after 1986, plus interest, exceed more than half of the value of your pension earned after 1986, you'll receive a refund of the excess.
Note: If you ceased employment in education before July 1, 2001, specific eligibility rules apply. Please contact us for more information on your benefit options.
Receive pension value in a lump sum
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If you terminate plan membership, your annual lifetime pension may be below the threshold for payment as a monthly pension. If it’s below the threshold, we must pay the value of your pension as a non-locked-in lump sum rather than a small monthly pension.
This lump-sum pension value is the estimated amount of money you’d need today to pay for your future pension. You can receive the payment any time up until the end of the calendar year you turn 71 in the following ways:
- cash (payable in the form of a cheque or direct deposit to your bank account),
- transfer to an RRSP,
- transfer to a Registered Retirement Income Fund (RRIF), or
- combination of these options.
Cash payments are subject to withholding tax and may require additional tax payments when you file your income tax return. If you choose to transfer funds to an RRSP or RRIF, it’s important to understand the Income Tax Act limits the amount that can be transferred on a tax-sheltered basis. Any excess amounts are paid in cash and subject to withholding tax.
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We use the Year’s Maximum Pensionable Earnings (YMPE) of the year you end your plan membership to determine if you’re eligible for a monthly pension. If your annual lifetime pension, plus any applicable inflation adjustments, is less than or equal to 4% of the YMPE, we must pay the value of your pension as a non-locked-in lump sum.
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For detailed information about ending your membership in our plan, please do the following:
- If you haven’t already, register for an online account.
- Take a moment to review and update your profile and ensure your information is correct.
- You must’ve resigned from working in education in Ontario or have plans to resign before the end of the month following the month in which you request your options package. If you’re an occasional teacher, your resignation date will be the last date you worked.
- Request your options package. The date you request your options package will be considered your notification date. We’ll collect information from you to prepare an accurate options package. Protecting your personal information is our priority, please review our Privacy Notice for Members.
- Watch for an email from us notifying you when your package is available for you to download in your Document Centre. This should happen within 30 days of you requesting the package or your resignation date (whichever is later).
- Review your options package, and take note of important deadlines, your package’s expiration date and next steps.
- Upload your completed application, and all supporting documents, to your Document Centre before the package’s expiration date.
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- Working in education in Ontario between your resignation date and when we receive your completed application will void your options package. Working during that period adds credit, which may change your entitlement.
- The lump-sum pension value provided in your option package may be different than any values previously quoted to you, due to fluctuations in interest rates and bond yields. The specific day you request your package may affect the lump-sum value. We use the value as at the later of your resignation date or your notification date (the date you request your options package).
- We can’t guarantee whether the lump-sum pension value will be higher or lower from day to day, and it could vary considerably from month to month.
Transfer to a locked-in retirement account
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A commuted value (CV) is the estimated lump sum dollar amount you'd need today to pay for your future pension. It's based on a number of factors, including:
- Your age
- Your pension amount
- Your qualifying years
- Bond yields
You can transfer your pension's CV to a locked-in retirement account (LIRA) to provide you with a life annuity or life income fund (LIF) starting no earlier than age 50.
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The interest rates and inflation rates used in calculating the CV are determined by real return federal bond yields, and provincial and corporate bond indices. Real return bonds are long-term bonds that pay the holder of the bond a specific sum of money, at a specific interest rate, plus the rate of inflation. When the yields of those bonds increase, the CV decreases; when they decrease, it increases.
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You must terminate employment and request a transfer before you're eligible for an immediate pension. This means you can request a transfer up until the earlier of:
- The month before you turn 50, or
- The date on which you're approved for a disability pension
Note: If you ceased employment in education before July 1, 2001, different deadlines and eligibility rules apply. Please contact us for more information on your benefit options.
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There are five things to keep in mind when considering a commuted value (CV) transfer:
- Income from a CV may be greater or less than a lifetime pension
- The CV is based on a number of assumptions. As such, the income provided by the CV may be either greater or less than the pension payments you could receive from Ontario Teachers’.
- You assume responsibility for investing the funds
- By taking this lump sum when you leave teaching, you also assume the responsibility and costs for investing it - with its eventual value affected by the ups and downs of the economy, inflation and the investment decisions you make. In contrast, a formula determines your pension; it doesn't depend on investment returns and it's fully protected from inflation.
- Income-tax regulations can affect CV transfers
- If you transfer the CV, you could incur additional costs that reduce the amount available for investments. For instance, a large CV transfer may not be entirely tax-sheltered.
- If you transfer funds over this limit (which depends on your age and pension amount), the excess is considered income and is taxable in the year we transfer the funds.
- Funds transferred to another defined benefit pension plan may not be subject to this limit.
- There may be an impact on your RRSP room
- If you transfer the CV, a pension adjustment reversal (PAR) will be calculated. A PAR is the difference between the value of the post-1989 portion of your termination payments and the pension adjustments (PAs) reported for the same period. Consequently, you may be able to restore lost RRSP room.
- Note: If the CV exceeds the tax-sheltered limit, the PAR will be zero.
- You may be able to repay a CV transfer
- If you transfer the CV and later return to teaching, it's possible to repay the transfer and reinstate your credit. However, the repayment amount is the actuarial cost to restore your credit or the amount paid plus interest, whichever is greater.
- Income from a CV may be greater or less than a lifetime pension
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If you meet the eligibility criteria above, follow these steps to take the commuted value of your pension:
- Visit the Commuted value section of your account to see your estimated value.
- Take a moment to review and update your profile and ensure your information is correct.
- Resign from working in education in Ontario, or have plans to resign before the end of the following month from when you request your options package.
- Request your options package. We’ll collect information from you to prepare an accurate options package, including your commuted value. Protecting your personal information is our priority, please review our Privacy Notice for Members.
- Watch for an email from us notifying you when your package is available for you to download in your Document Centre. This should happen within 30 days of you requesting the package or your resignation date (whichever is later).
- Review your package, and take note of important deadlines, your package’s expiration date and next steps.
- Upload your completed application, and all supporting documents, to your Document Centre before the package’s expiration date.
Keep your pension with us
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If you terminate your membership in the pension plan on or after July 1, 2012, you automatically qualify for a future pension.
You become eligible for an unreduced pension when you reach:
- your 85 factor (age + qualifying years), or
- age 65
If you're not eligible for an unreduced pension by the time you want to leave teaching, you can take a reduced retirement pension when you're at least 50 years old. Your reduced pension is calculated just like your basic pension, and then reduced by the appropriate percentage for your situation.
Find out what percentage your pension will be reduced by if you take a reduced retirement pension.
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Here's an at-a-glance comparison of these two options:
Deferred pension Commuted value - Your pension is based on your years of credit and average best-five years' salary. It isn't based on investment returns or contributions.
- Your pension is guaranteed for life and can be increased for inflation.
- You can provide a survivor pension to ensure financial security for your loved ones after your death.
- If you return to teaching before retirement, your new service and salary information will be included in the calculation of any future benefit.
- You assume sole responsibility for investment gains and losses.
- Your retirement income must be within the range allowed for a life income fund.
- You'll pay transaction fees and expenses to have your money managed or to manage it yourself.
Deferred pension
When you stop teaching, leave your vested pension in the plan and receive a deferred pension in the future. You can collect your pension any time after age 50.
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If you leave your pension with us, apply four months before you want your pension to begin.
Transfer to a different pension plan
We have transfer agreements with other major public sector plans in Ontario and with teachers' plans in other provinces. If you become employed by one of them, you can transfer your credit into your new employer's plan and expect similar benefits upon retirement as you would if you had remained teaching.
If you move to an organization that doesn't have an agreement with us, you may be able to transfer the commuted value to your new plan and apply it toward a purchase of credit.
Major Ontario Pension Plans (MOPPs) Transfer Agreement
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You may be able to transfer your pension to your new pension plan under the Major Ontario Pension Plans (MOPPs) Transfer Agreement. Consolidating your pension assets may allow you to retire earlier and/or with a larger pension.
The following pension plans participate in the MOPPs Transfer Agreement:
- Electrical Safety Authority Pension Plan
- Hydro One Inc. Pension Plan
- Independent Electricity Market Operator Pension Plan
- Ontario Municipal Employees Retirement System (OMERS)
- Ontario Power Generation Inc. Pension Plan (OPG)
- Ontario Public Service Employees Union Pension Trust (OPTrust)
- Ontario Pension Board (OPB)
- Workplace Safety & Insurance Board Employees Pension Plan (WSIB)
To qualify, you must:
- Join your new MOPPs employer within 18 months of leaving Ontario Teachers'
- Apply for a transfer within six months of when you start contributing to your new pension plan, and
- Be entitled to a benefit from Ontario Teachers'
If you're ineligible to transfer credit under the MOPPs agreement, contact your new pension plan for other possible portability options.
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The money available to transfer under the agreement is based on the actuarial value of your pension. The value reflects your salary, your credit and plan features, such as early retirement options, inflation protection and survivor benefits. Because of different plan features, the credit you receive in your new pension plan may not equal the credit you have in Ontario Teachers'.
Shortfall of funds
If there's a shortfall of funds, you may be able to top up all or part of the difference.
Tax implications
The transfer of pension credit for service accumulated after 1989 may result in a past service pension adjustment (PSPA). A PSPA will reduce your RRSP contribution room. A PSPA is usually generated if your new pension plan and Ontario Teachers' have different benefit formulas, or if you top up any shortfall of funds being transferred.
A PSPA must be approved by the Canada Revenue Agency (CRA) before the transfer can be completed. CRA usually takes 60 to 90 days to do that. If the PSPA isn't approved, you may not be allowed to transfer credit.
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Step 1 – Request a quote
Complete the form Request for Transfer Quotation (Appendix A, Major Ontario Pension Plans) (page 3) and send it to your new pension plan, along with a photocopy of your birth certificate, Canadian passport or Ontario driver's licence, within six months of when you start contributing to the plan.
Step 2 – Pension plan provides estimate
If you're eligible to transfer credit, your new pension plan will supply a quote, referred to as the Transfer Estimate and Acceptance (Appendix B), to help you decide whether or not to transfer your pension.
Step 3 – Decide whether to transfer
To proceed with the transfer, return a signed copy of the Appendix B to the importing plan within 90 days.
Transferring pension credit from one plan to another typically takes eight to 12 months, depending on the complexity of the transfer and how quickly your new plan receives information from you and Ontario Teachers'.
Interprovincial transfers
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You may be able to transfer your Ontario Teachers' pension to your new teachers' pension plan under the Interprovincial Transfer Agreement. Consolidating your pension assets may allow you to retire earlier and/or with a larger pension.
The following plans participate in the Interprovincial Transfer Agreement:
- Alberta Teachers' Retirement Fund Board (ATRF)
- British Columbia Teachers' Pension Plan
- Canadian Teachers' Federation Employee's Pension Plan
- Manitoba Teachers' Retirement Allowances Fund (TRAF)
- New Brunswick Teachers' Pension Plan
- Nova Scotia Teachers' Pension Plan
- Ontario Teachers' Pension Plan
- P.E.I. Teachers' Superannuation Fund
- Retraite Québec
- Saskatchewan Teachers' Retirement Plan (STRP)
- Saskatchewan Teachers' Superannuation Commission
- Teachers' Pension Plan Corporation Newfoundland & Labrador
You may qualify to transfer credit if:
- You left your pension benefit in Ontario Teachers', and
- You aren't receiving a pension from either your new plan or Ontario Teachers'
If you're ineligible to transfer credit under the Interprovincial Transfer Agreement, contact your new pension plan for other possible portability options.
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The money available to transfer under the agreement is based on the actuarial value of your pension. The value reflects your salary, your credit and plan features, such as early retirement options, inflation protection and survivor benefits. Because of different plan features, the credit you receive in your new pension plan may not equal the credit you have in Ontario Teachers'.
Shortfall of funds
If there's a shortfall of funds, you may be able to top up all or part of the difference.
Tax implications
The transfer of pension credit for service accumulated after 1989 may result in a past service pension adjustment (PSPA). A PSPA will reduce your RRSP contribution room. A PSPA is usually generated if your new pension plan and Ontario Teachers' have different benefit formulas, or if you top up any shortfall of funds being transferred.
A PSPA must be approved by the Canada Revenue Agency (CRA) before the transfer can be completed. CRA usually takes 60 to 90 days to do that. If the PSPA isn't approved, you may not be allowed to transfer credit.
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You can apply to transfer your pension any time before you retire, provided you have contributed to your new plan for at least 20 days after your resignation date from your former employer. A transfer typically takes eight to 12 months to complete, depending on the complexity of the transfer and how quickly your new plan receives information from you and Ontario Teachers'.
Step 1 – Request a quote
Complete two copies of the form Interprovincial Transfer Application, Appendix A (page 3). Send one copy to your new pension plan and one to Ontario Teachers', along with a photocopy of your birth certificate, Canadian passport or Ontario driver's licence as proof of age.
Step 2 – Pension plan provides estimate
If you're eligible to transfer credit, your new pension plan will provide a Transfer Estimate and Acceptance, Appendix B.
Step 3 – Decide whether to transfer
To proceed with the transfer, return a signed copy of Appendix B to both plans within 60 days.