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The Ontario Teachers’ Federation (OTF) and the Ontario government began phasing in contribution rate increases, totalling 3.1% of your earnings, in 2007.
Contributions will increase from an average of 8% of earnings to 11% by 2009. The 2009 rate is subject to change following an assessment of the plan’s financial status in 2008.
The rate increases, the first since 1990, will eliminate a $6.1 billion funding shortfall in the pension plan as of January 2005. The shortfall developed largely because pension plan costs have increased faster than plan assets, despite continued strong returns on plan investments.
The Ontario government and designated employers will continue to match total member contributions at the new, higher rates.
Check your pay stubs each January to see how the increases will affect you or consult the chart, How much will you contribute to your pension?
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Annual contribution rates (As a percentage of your annual salary) |
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Year |
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Teachers |
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Ont. government/designated employers^ |
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Up to CPP limit* |
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Above CPP limit* |
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Increase |
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Up to CPP limit* |
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Above CPP limit* |
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Increase |
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2006 |
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7.3% |
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8.9% |
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-- |
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7.3% |
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8.9% |
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-- |
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2007 |
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9.3% |
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10.9% |
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2.0% |
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9.3% |
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10.9% |
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2.0% |
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2008 |
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9.6% |
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11.2% |
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0.3% |
** |
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10.4% |
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12.0% |
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1.1% |
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2009+ |
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10.4% |
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12.0% |
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0.8% |
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10.4% |
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12.0% |
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-- |
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Total |
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-- |
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-- |
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3.1% |
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-- |
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-- |
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3.1%
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* The Canada Pension Plan (CPP) limit is the maximum earnings on which CPP contributions and benefits are based. The limit, which changes annually, is $44,900 in 2008.
** Member contributions in 2008 are being partially subsidized by the OTF with a credit reserve from the 1998-2001 pension negotiations.
^ Designated employers include private schools and other organizations, such as the OTF, that participate in the pension plan.
+ Contribution rates in 2009 and later years may change, depending on the financial status of the pension plan.
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How much will you contribute to your pension?
Here’s roughly how much members will contribute to the Teachers’ pension plan in 2008 and 2009. The increases will be partially offset by lower taxes because pension contributions are tax deductible.
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Annual contributions* |
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Salary |
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2008 |
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2009 |
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$30,000 |
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$2,880 |
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$ 3,120 |
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35,000 |
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3,360 |
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3,640 |
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40,000 |
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3,840 |
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4,160 |
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45,000 |
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4,322 |
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4,682 |
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50,000 |
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4,882 |
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5,282 |
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55,000 |
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5,442 |
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5,882 |
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60,000 |
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6,002 |
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6,482 |
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65,000 |
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6,562 |
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7,082 |
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70,000 |
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7,122 |
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7,682 |
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75,000 |
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7,682 |
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8,282 |
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80,000 |
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8,242 |
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8,882 |
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85,000 |
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8,802 |
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9,482 |
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$90,000 |
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$9,362 |
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$10,082 |
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*All numbers are approximate and assume a fixed CPP limit of $44,900. The 2009 rate is subject to change following an assessment of the plan’s financial status in 2008.
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