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The Ontario Teachers' Pension Plan must have sufficient assets to meet its long-term pension obligations to members. Ontario Teachers' Federation (OTF) and the Ontario government set contribution and pension benefit levels based on the plan's funding status.

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preliminary funding surplus


average contribution rate per plan sponsor


inflation protection on all pensions

As at January 1, 2023

OTF and the Ontario government decided to file the January 1, 2023 funding valuation with the regulators.

The $17.5B surplus was classified as a contingency reserve to help facilitate stability in members’ contributions and benefits in case a future valuation shows a decline in assets and / or an increase in pension costs.

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Funding considerations

As the plan sponsors, Ontario Teachers’ Federation (OTF) and the Ontario government must consider a range of factors and risks when considering the long-term financial health of the plan.

Plan history

The pension plan continues to evolve to meet changing economic and demographic factors. A record of changes in contribution rates, pension benefits and inflation protection levels can be found below, along with a summary of decisions made to address funding shortfalls or surpluses since the pension plan became an independent entity in 1990.

Frequently asked questions about funding

  • A: Yes, your pension is safe and secure.

    The Ontario Teachers’ Pension Plan Board (Ontario Teachers’) is well positioned to navigate an uncertain and unpredictable investment and geopolitical environment. By sticking to their fundamentals, including strong liquidity, aligned partnerships and top-notch talent, Ontario Teachers’ will continue to deliver on their goals of first-class service and retirement security for you over the long-term.

  • A: Members can rest assured that there is no current impact on pension payments. Retired members will continue to receive pension payments as scheduled. Pension income is based on your earnings and service in the plan.

    Also, with the decision to file the January 1, 2023 valuation, there will be stability in contribution and benefit levels at least until the next valuation is filed. The next required funding valuation filing is as at January 1, 2026.

  • A: Classifying the surplus as a contingency reserve is beneficial for plan members because it facilitates greater stability of contribution rates and benefit levels in case a future filed funding valuation shows a decline in assets or an increase in pension costs.

    It is aimed at keeping the plan fully funded with “base provisions” as referred to in the Funding Management Policy (FMP) – meaning an average contribution rate of 11% and full inflation protection on all pension credit.

  • A: We continue to live in an uncertain and unpredictable investment and geopolitical environment with the highest inflation levels since the late 1970s and early 1980s. Given the current challenges and an uncertain long-term outlook, the board decided to hold the real discount rate steady at 2.45%.

  • A: The FMP is an important document that provides the sponsors with a guidance framework for decision making when there is a funding surplus or shortfall. A key component in the FMP is the concept of funding zones, each defined by a range. The funding zones provide a point of reference for whether action is required by the sponsors and, if so, guidance is provided on how to use any surplus funds or resolve any shortfall. Specifically, the FMP is used to determine when it is possible or necessary to increase or decrease benefits, lower or raise contributions, or simply conserve assets for an uncertain time. The FMP outlines preferred mechanisms associated with its various funding zones and it is ultimately the sponsors’ responsibility to decide which actions to take. 

    An infographic showing the Funding Management Policy Zones
  • A: Shortfalls could happen in the future. However, financial levers available to the sponsors help manage the plan’s funding status. If needed, the sponsors can adjust benefits and/or contribution rates or utilize conditional inflation protection to keep the pension plan in balance.

    That balance continues to be challenged by numerous factors including member demographics, an uncertain and unpredictable investment and geopolitical environment, a high inflationary environment, climate change and highly competitive investment markets. There can be no assurance of high returns in this complex and rapidly changing investment environment.

  • A: A future deficit could occur if assets are outweighed by liabilities on a future valuation date. Reserving surplus when a valuation is filed with the regulatory authorities makes it available for investing and earning returns, helping to protect the fund against future deficits. In other words, rather than being a cure, it is a preventative measure against future deficits.

  • A: Annual increases to pensions in pay are calculated by comparing the average Consumer Price Index (CPI) for the 12-month period ending in September to the previous 12-month average (the CPI Ratio). This approach smooths out short-term volatility and is similar to the approaches used by many large pension plans. The current high levels of inflation will be factored into future increases to pensions as they flow into the averaging period. 

    The level of inflation protection provided to members is a plan sponsor decision. When the plan has a funding shortfall, smaller cost-of-living increases help to bring the plan back into balance. When there is a funding surplus, inflation levels may be partially or fully restored.

    Pension credit earned before 2010 is 100% protected against inflation. Annual cost-of-living increases for pension credit earned after 2009 are conditional and depend on three factors:

    1.     Changes in the cost of living, as measured by the CPI Ratio as defined above.

    2.    The plan’s funding status, which is used to gauge how much of the CPI Ratio the plan can afford to provide.

    3.    When you earned your pension credit.

    Inflation Protection Levels




    Earned before 2010



    Earned during 2010-2013

    50% to 100%


    Earned after 2013

    0% to 100%


    *Percentage of the CPI Ratio.


    The current 100% inflation level will remain in effect at least until the next funding valuation is filed with the regulators. A funding valuation must be filed at least once every three years.



    To see how inflation increases affect your annual pension, register or sign in to your online member account.

  • A: Pension plan provisions can change over time and no generation of teachers has received exactly the same benefits as the one before or after it. For example, inflation protection was not provided automatically until the mid-1970s, and many older members did not have an opportunity to retire at an 85 factor or receive a 10-year pension guarantee.

    Keep in mind that Ontario’s Pension Benefits Act protects the value of pension benefits already earned by working and retired members.

  • A: No. The plan is not designed to take additional contributions from members.



    ·         Contact the Member Help Centre

Have questions about inflation?

Find out what three factors determine your annual inflation adjustment.

Learn how inflation protects your pension