OTPP - Pension Benefits History

Pension Benefits History

Year	Event
1917	Pension plan created for Ontario teachers. Forty years of service required to qualify for maximum annual pension of $1,000. No death benefits, no refund of contributions for teachers who leave before retirement age.
1927	Maximum annual pension increased to $1,250 after 39 years of service. Teachers’ Superannuation Commission created to administer the pension plan.
1928	Unreduced pension available after 40 years’ credit, reduced pension after 30 years and disability pension after 15 years.
1932	Survivor pensions introduced.
1933	Maximum annual pension increases to lesser of $1,250 of 60% of average salary.
1936	Only salaries earned after 1917 are used to calculate pensions, increasing the average salaries on which pensions are based.
1945	Unreduced pension available after 36 years of credit and age 65 for males; 36 years of credit and age 62 for females. Maximum annual pension increases $250 to $1,500.
1949	Unreduced pension available at age 62 with 35 years’ credit or at any age with 40 years of credit. Maximum annual pension doubles to $3,000. Reduced pension available at age 62 with 25 years' credit or at any age with 30 years’ credit. Survivor pensions introduced. Female teachers only qualify for this benefit if their spouse or children are fully dependent.
1953	Elimination of $3,000 cap on annual pension. Teachers who leave the plan before retirement qualify for a refund of contributions.
1954	Pensions based on last 10 years’ average salary.
1961	Contributions returned with interest if member has at least 15 years’ credit and is forced into retirement before becoming eligible for a pension.
1965	Reduced pension available after age 55 with at least 10 years of credit.
1966	Contributions and benefits are integrated with newly established CPP. CPP reduction applied to reduced pensions to reflect plan’s integration. Disability pensions available after 10 years' credit. Survivor pensions available for active members after 10 years’ credit. Pensions based on best-seven years’ salary, down from 10 years.
1971	90 factor introduced, enabling teachers to retire when their age + years of credit = 90. CPP reduction applies at age 65 for all pensions, not just reduced pensions. Survivor pensions introduced for widowers of female members. Now possible to receive both a survivor pension and a retirement pension.
1976	Inflation protection added. No reduction made to survivor pensions where spouse is more than 10 years younger than the member. Survivor pensions that are terminated on remarriage are now reinstated on the death of the new spouse or upon divorce.
1984	Credit and salaries are now annualized. Any credit in a school year will count as a qualifying year for the purposes of establishing when a teacher can retire with an unreduced pension. Pensions are based on best-five years' of average salary. CPP reduction is lowered, allowing teachers to keep more of their pension after age 65. Survivor pensions are no longer terminated on remarriage. Survivor pensions extended to common-law spouses. Pensioners are allowed to work for less than 21 days in a school year without affecting the inflation adjustment date.
1986	Early retirement window opened between May 31, 1986, and Sept. 1, 1989. Provides unreduced pensions to members who retire after age 55 with at least 10 years' credit.
1987	Unreduced pension extended to members who retire with at least 35 qualifying years between May 31, 1987, and Sept. 1, 1990.
1988	Reduced pensions available after age 55 to members with at least two qualifying years of credit after 1986. Post-86 portion of pre-retirement death benefit becomes commuted value of accrued pension for credit after 1986.
1990	20 days of employment required in a school year to receive a year of qualifying credit (now also used to calculate age reductions). 50% survivor pension provided automatically to spouse at inception of pension.
1997	Early retirement reduction for immediate reduced pensions is 2.5% for each point away from the 90 factor. CPP reduction factor lowered to .68% from .7%. Requirement for a school year to be annualized is reduced to 10 years from 20 years.
1998	85 factor introduced as a temporary benefit. CPP reduction factor lowered to .6% from .68%. Survivor pensions provided to same-sex partners.
2000	Introduction of commutation of deferred pensions and pensions in pay.
2001	85 factor made permanent feature of pension plan. CPP reduction factor is lowered to .45% from .6% and reduction is based on five-year average CPP earnings ceiling. Change allows teachers to keep more of pension after age 65. Adjustment made to pensions based on best-seven or last 10 years to approximate change to best-five years’ average salary. 10-year pension guarantee introduced. Reduced retirement pensions available at age 50. Teachers on long-term disability continue to build credit without making contributions and salaries, for pension purposes, adjusted for inflation.
2007	Contributions increase 3.1 percentage points over three years, beginning in 2007.
2008	Conditional inflation protection introduced. Inflation increases for credit earned after 2009 can range from 50% to 100% of the annual cost-of-living increase.
2012	Conditional inflation protection used for first time. Inflation increases for retirees — on the portion of credit earned after 2009 — are set at 60% annually. Inflation protection remains 100% of the annual cost-of-living increase for pension credit earned until the end of 2009.

Posted December 2011