• 1. Is my pension safe?

Current Ontario legislation protects the value of pension benefits that both working and retired members have already earned. Only contribution rates and pension benefits to be earned in future years can be adjusted during a teacher’s career in response to funding surpluses or shortfalls.

For example, about a decade ago, benefits were enhanced using surplus funds. More recently, contributions were increased to address a funding shortfall.

It’s important to remember that your Teachers’ pension is not dependent on any one year’s investment results or the value of the pension fund when you retire. Your pension is defined by a formula based on years of service and average earnings.

• 2. Is the pension plan running out of money?

No, the pension plan has enough money to pay pensions for many, many years. But funding challenges persist when we look out 70 years or more. That’s how long the pension plan needs to be funded to pay benefits promised to all current members and their survivors.

A preliminary funding valuation conducted as at Jan. 1, 2010, showed a $17.1 billion funding shortfall.

Steps will be taken to eliminate the shortfall if it still exists when the next funding valuation is filed with the provincial pension regulator. The next mandated filing is due in 2012, but the valuation can be filed sooner at the discretion of the Ontario Teachers’ Federation (OTF) and the Ontario government, which jointly sponsor the plan.

• 3. Could the government change the legislation that protects the benefits
  I’ve already earned?

We cannot speculate on that. Only the government can change legislation.

Keep in mind that the OTF and the Ontario government, which jointly sponsor the pension plan, have several options for dealing with funding shortfalls. They can: increase contribution rates; invoke conditional inflation protection for pension credit earned after 2009; change other benefits members will earn in the future; or adopt a combination of these measures.