A two-tiered formula is used to calculate contributions to the Teachers' pension plan. Contributions are lower on salary up to the Canada Pension Plan (CPP) contributions and benefits limit, and higher on any salary above the CPP limit.
Year
Up to CPP limit*
Above CPP limit*
Increase**
2011
10.4%
12.0%
n/a
2012
10.8%
12.4%
0.4%
2013
11.15%
12.75%
0.35%
2014
11.5%
13.1%
0.35%
Total increase:
1.1%
*The CPP limit is the maximum earnings on which CPP contributions and benefits are based. The limit, which changes annually, is $50,100 in 2012. **As a percentage of salary
The Ontario government and other employers match total annual member contributions.
2. How much will I contribute?
Take a look at the chart below to see how the contribution rates affect teachers at different salary levels.
Annual salary
Annual contributions*
2012
2013
2014
$30,000
$3,240
$3,345
$3,450
$40,000
$4,320
$4,460
$4,600
$50,000
$5,400
$5,575
$5,750
$60,000
$6,638
$6,848
$7,058
$70,000
$7,878
$8,123
$8,368
$80,000
$9,118
$9,398
$9,678
$90,000
$10,358
$10,673
$11,988
$100,000
$11,598
$11,948
$12,298
*All numbers are approximate and assume a fixed CPP limit of $50,100.
3. Is there a cap on contribution rates?
The OTF and the Ontario government have agreed their matching contribution rates should not exceed 15% of base earnings above the Canada Pension Plan (CPP) limit. The CPP limit, which changes every year, is $50,100 in 2012. If rates would have to climb higher than 15% to keep the pension plan healthy, other alternatives would be considered.
4. Do contribution rates affect my RRSP room?
No, contribution rates do not affect how much you are allowed to contribute to your RRSP. The government formula used to calculate your RRSP contribution room is based on the deemed value of the benefit you earn in the Teachers' pension plan. It is not based on how much you contribute to the plan.
5. I'm unhappy with the contribution rates. Who can I talk to?
Consider contacting the OTF or your affiliate pension representative. The OTF and Ontario government spent months exploring various funding solutions before reaching their decision to increase rates.
6. I'm young. Will I pay more than I can expect to receive?
Under Ontario's Pension Benefits Act, you cannot pay for more than half of the value of the pension earned for service after 1986. Any excess amount is refunded to you (or your estate) on termination of membership, death or retirement.
7. Can Teachers' invest additional contributions on my behalf?
The simple answer is no. Our mandate and certain laws limit us to managing the Teachers' pension fund and administering the plan on behalf of members. For example, in order for our plan to comply with current tax legislation in Canada and the U.S., we do not directly invest or manage personal investments of our members or their families. Other plans have different mandates.
We continuously evaluate opportunities to enhance our member service offer. However, there are no current proposals to allow members to make personal investments or additional voluntary contributions to the plan. These activities would require structural changes to our legislated mandate and to our organization.
