Being a defined plan means that the contributions you and the government make to your retirement provide for the benefits available at the date of your retirement. Currently based on years of service and your best five years' salaries.

The Plan is reviewed on a triennial basis. Federal and Provincial legislation regarding pension plans contain the parameters within which registered pension plans operate.

When the plan has an actuarial gain, the Partners determine how the gains are to be distributed. When there are loses, the Partners must share the responsibility of making up the shortfall. Retired members do not share in this liability.

Improvements made to benefits after retirement are funded by plan surpluses or increased contribution levels, or both.

A pension plan has existed for Ontario teachers since 1917. Until 1990, the plan was restricted to investing in non-marketable Government of Ontario debentures. In 1990, the Ontario government created the Ontario Teachers' Pension Plan (OTPP) with full authority to:

• invest all assets;

• administer the pension plan, and;

• pay members and their survivors the benefits promised.

In the financial media, the Ontario Teachers' Pension Plan is often referred to, simply, as ‘Teachers'.

A six-member Partners' Committee (three civil servants appointed by the government, three OTF appointees - President, Past President, First Vice-President) are responsible for any changes in the plan.

They also appointing the nine member Board of Directors. Four Directors are appointed by each of the Partners and a neutral Chair is selected.

The government of the day appoints its three members to the Partners' Committee. Government policy determines the direction its nominees pursue. Note that, being a government, it has legislative power available to influence the direction of negotiations beyond that of its three named members.

The Ontario Teachers' Federation appoints three members to the Partners' Committee. The OTF has established procedures to guide its nominees. These procedures include opportunity for all contributors and beneficiaries to recommend direction to the OTF representatives through the organization to which they belong.

Every three years, there is a review of the status of the Ontario Teachers' Pension Plan. The actuarial integrity of the Plan is studied including any deficit, surplus and any changes required or to be considered.

This review is handled in a negotiations process between the Government of Ontario and the Ontario Teachers' Federation.

OTF Procedures

1. Each OTF Affiliate, the Retired Teachers' of Ontario/les enseinantes et enseignants retraités de l'Ontario (RTO/ERO), the Ontario Public Supervisory Officers' Association (OPSOA), the Ontario Catholic Supervisory Officers' Association (OCSOA), l'Associationdes surintendantes et surintendants franco-ontariens (ASFO), the Ontario Principals' Council (OPC), the Catholic Principals' Council of Ontario (CPCO), l'Association des directions et direction adjointes des écoles franco-ontariennes (ADFO), or designated organizations, may forward requests for changes to the Plan to the OTF Executive.

2. The OTF Executive refers these requests for change to the OTF Pension Committee which analyses the cost and impact and then reports recommended disposition and priorities to the OTF Executive.

3. The OTF Executive refers the Pension Committee Report to those named in Procedure 1 for study and report to the June OTF Executive Meeting.

4. The OTF Executive reports its recommendations to the Annual Meeting of the OTF Board of Governors.

5. The OTF Board of Governors approve the content of the Preliminary Submission for negotiation with the Government.

Negotiations Process

1. The OTF Executive is responsible for all aspects of pension negotiations and reporting to the Board of Governors.

2. The Pension Negotiating Committee is comprised of the OTF President, the OTF First Vice-President, one staff representative from OTF, each Affiliate and RTO/ERO.

3. The OTF Pension Negotiating Committee concludes an agreement within the parameters determined by the OTF Executive and adjusted from time to time during negotiations.

Ratification

1. The OTF Pension Negotiating Committee submits a proposal for settlement to the OTF Executive.

2. The OTF Executive either:

   • forwards the proposal to the OTF Board of Governors with recommendation for acceptance or rejection; or,

   • return the proposal to the Pension Negotiating Committee for further negotiations.

3. The OTF Board of Governors ratifies or rejects the proposal by majority vote.

Retired members of the Plan have access to the decision making process through their local RTO/ERO Districts to the RTO/ERO Pension Committee and the OTF Pension Committee. An RTO/ERO member sits on the OTF Pension Negotiating Committee.

The Ontario Teachers' Pension Plan (OTPP) is an independent corporation, responsible for the retirement income of approximately 150,000 elementary and secondary school teachers, 72,000 retired teachers and their survivors, and 90,000 former teachers with money in the plan.

The pension board has the fiduciary duty to administer the plan and manage the investment fund in the best interests of present and future plan members and their survivors. This duty is vested in a nine-member board of directors appointed equally by the partners.

Day-to-day management is delegated by the directors to a chief executive officer and his staff.

Operation

The mandate of the OTPPB is to administer the pension plan and manage its investments to earn the best possible rate of return at a moderate level of risk. There are legislative parameters within which investments can be made.

It is Co-sponsored by the Province of Ontario and the Ontario Teachers' Federation (OTF), with authority for plan changes delegated to the six-member Partners' Committee.

The overall policy direction provided by a board of directors composed of nine members, four chosen by Minister of Education and four by OTF, with a neutral chairperson.

Responsibility for day-to-day operation delegated to Chief Executive Officer, Jim Leech, and his staff of approximately 500.

The OTPP provides services directly to all members and employers.

Regular communications sent directly to members' homes are:

• the Exchange newsletter;

• Pension News for pensioners;

• Annual Statement of pension benefits;

• and highlights of the Annual Report.

All registered pension plans must meet certain legislative requirements, including:

• Teachers' Pension Act

• Income Tax Act

• Pension Benefits Act

NOTE: This document is provided for general awareness only. Contributors and Retirees should contact their own professional organization for specific information.

Sources: RTO/ERO, OTF/FEO