Glossary

10-year pension guarantee option

If you die before you've received 10 years’ worth of pension payments, this option provides your CPP-adjusted pension to your survivor or estate for the balance of 10 years.

50% rule refund

This rule applies when survivor benefits are calculated for pre-retirement deaths. If your contributions from 1987 until your death exceed one half of your commuted value for the same period, we'll refund the difference to your estate.

85 factor

See qualifying factor.

Actuarial cost

Actuarial cost is the present value of the expected improvement in your pension resulting from the buyback of credit. It's based on assumptions about interest rates, inflation rates, mortality rates, salary increases, and other factors. It also takes into account your age, pension credit and salary.

Average CPP salary

This is the lesser of your average salary or the five-year average of the maximum pensionable earnings under the Canada Pension Plan (CPP) ($68,500 in 2024).

Average salary

The average of your best-five years' salaries. If you have less than full credit in a school year, we'll use your annual rate of pay unless:

• You start to receive a pension
  
• You purchase credit in that school year, or
  
• It's your first year of employment

If you start to receive your pension in the middle of the school year, your last school year's earnings are annualized only up to the start date of your pension. This can lower your best-five years' average salary. To avoid this, we take your sixth highest year of annualized earnings and your final year's annualized earnings, and obtain an average that we then use as your fifth best year of earnings.

Break in service

A break in service occurs when you resign from teaching and remain a member of the pension plan. You may be eligible to purchase credit for breaks in service due to disability.

Commuted value

The commuted value is the estimated lump sum dollar amount you'd need today to pay for your future pension. It depends on a number of factors, including your age, your earned pension benefit, your qualifying years of service, and bond yields. It can fluctuate considerably with changes in inflation rates, interest rates or the calculation basis.

Conditional inflation protection

The inflation protection that some retirees receive on a portion of their pension is conditional on the plan's ability to provide it. Pension credit earned before 2010 is fully protected against inflation, while pension credit earned after 2009 includes conditional, or variable, inflation protection.

Consumer Price Index (CPI)

CPI is a measure of inflation produced by Statistics Canada. Ontario Teachers' uses the CPI for Canada to calculate annual inflation adjustments to pensions and deferred pensions.

CPP credit

The number of years of credit during which you contributed to the Canada Pension Plan (CPP).

CPP integration

Like most major pension plans in the country, Ontario Teachers' is designed to work with the Canada Pension Plan (CPP).

Ontario Teachers' provides a bridge benefit, which is intended to supplement your retirement income until age 65 when you're eligible for an unreduced CPP pension. The month after you turn 65, or immediately if you start a CPP disability pension, the bridge benefit ends and your Ontario Teachers' pension is adjusted (also referred to as CPP adjustment).

CPP adjustment

Like most major pension plans in the country, Ontario Teachers' is designed to work with the Canada Pension Plan (CPP).

Ontario Teachers' provides a bridge benefit, which is intended to supplement your retirement income until age 65 when you're eligible for an unreduced CPP pension. The month after you turn 65, or immediately if you start a CPP disability pension, the bridge benefit ends and your Ontario Teachers' pension is adjusted (also referred to as CPP adjustment).

When you turn 65 (or earlier if you take a CPP disability pension) your Ontario Teachers' pension will be adjusted by an amount slightly less than your CPP unreduced pension.

Credit

Credit is used to determine the amount of your pension, and is based on your actual teaching time.

Death after retirement

Death on or after the date of your first pension payment.

Death before retirement

Death before the date of your first pension payment.

Deferred pension

When you stop teaching, leave your vested pension in the plan and receive a deferred pension in the future. You can collect your pension any time after age 50. If you defer the start of your pension, your pension will reflect changes in the cost of living from the time you left employment in education to the time you begin collecting your pension.

Deferred salary leave (X/Y plan)

This is when you choose to have a portion of your salary held back for a prearranged length of time and then draw from your salary “bank” in the last year of the X/Y plan.

Deferred survivor pension

Spouses who are eligible for an immediate survivor pension can defer it and begin receiving it in the future.

Defined benefit plan

Ontario Teachers' is a defined-benefit pension plan. Your pension is determined by a formula, not by the return on investments.

Dependent children

Your dependent children must be reliant on you for support at the time of your death and be:

• Under age 18
  
• 18 to 24 years of age and enrolled in full-time, continuous education since age 18 or since your date of death, whichever occurred later, or
  
• Disabled, having been disabled without interruption since the date of your death
  

To be considered disabled, an individual must have a severe and prolonged mental or physical disability. A disability is severe if the person is incapable of regularly pursuing any substantially gainful occupation and it's prolonged if it's likely to be long, continuous, and of indefinite duration, or is likely to result in death.

Designated beneficiary

Any person or incorporated organization you designate to receive survivor benefits in the event that you do not have a survivor and you die before receiving your first pension payment.

Eligible spouse

Your spouse is your married or common-law partner. A common-law partner must have lived with you in a conjugal relationship for:

• At least three continuous years, or
• A shorter period if you're the parents of a child

To be eligible for a survivor pension, you and your spouse must not be living separate and apart when you receive your first pension payment. If you subsequently separate or divorce, your spouse remains eligible to receive a survivor pension.

Please contact us if:

• You retired or stopped working in education before 1990 as different rules may apply.
• You became a spouse after you started to receive your pension and directed us, in writing, to provide your new spouse with a survivor pension.
• You have a former spouse who's entitled to a portion of your survivor benefits (as assigned in a separation agreement or court order).

Employer-approved leave

Time off pre-approved by your employer for a specified, continuous period.

Equalization payment

In family law cases, a payment from one married spouse to the other to ensure that both parties receive an equal share of the net family property they accumulated during their marriage.

Family Law Valuation Date

The date on which spouses separate and there's no reasonable prospect that they'll resume cohabitation. 

Immediate pension

A pension starting the month after you stop teaching.

Life income fund (LIF)

A registered retirement income fund modified to meet the requirements of the Ontario Pension Benefits Act. Payment from a LIF must start by the calendar year following its establishment, but can't begin earlier than age 55 and must be within a prescribed range each year.

Living separate and apart

This means you're no longer sharing a spousal relationship (i.e., having joint finances, sharing a conjugal relationship) and intend to terminate your relationship. You can be living separate and apart without a formal separation agreement and/or in the same residence.

Locked in

When your pension or LIRA is locked in, you can't begin to receive it until you're 50. You also can't use it as collateral for a loan or assign it to someone else.

Locked-in Retirement Account (LIRA)

An RRSP modified to meet the requirements of the Ontario  Pension Benefits Act (PBA). Under the PBA, the money can only be used to:

• Purchase a deferred or immediate life annuity with payments beginning no earlier than age 50, or
• Transfer to another LIRA or a registered pension plan

Marital status

Single means that you've never been married.

Married means that:

• You're married, and
• You're not living separate and apart from your spouse

Common-law means that you're living with a person of the same or opposite sex in a conjugal relationship for:

• At least three continuous years, or
• A shorter period if you're the parents of a child

Separated means that:

• You're living separate and apart from the person to whom you're married
• You're not currently in a common-law relationship, and
• You haven't remarried

Divorced means that:

• You haven't remarried since your divorce, and
• You're not currently in a common-law relationship

Widowed means that:

• You haven't remarried since the death of your spouse, and
• You're not currently in a common-law relationship

Living separate and apart means that you're no longer sharing a spousal relationship (for example, eating meals together, sharing a conjugal relationship, participating together in social activities, or having joint finances) with the intention of terminating that relationship.

It's important to note that you can be living:

• Without a formal separation agreement, and/or
• In the same residence

If you're unsure whether this definition applies to you, contact us or your family lawyer.

Membership

You automatically become a member of the Ontario Teachers' Pension Plan and begin to accrue credit when your employer deducts pension contributions from your pay.

You qualify as a member if you have a Certificate of Qualification or current Letter of Permission and work:

• In any capacity for a school board in Ontario
• In any capacity for a designated private school or a designated organization, such as the Ontario Teachers' Federation, which participates in the plan under a special agreement
  
• As a teacher (includes, but isn't limited to, tutor, guidance counsellor, librarian, vice-principal, principal or other supervisory officer positions)
  • Under an authorized exchange program
  • For an Ontario government ministry
  • For the Toronto and Region Conservation Authority

Past Service Pension Adjustment (PSPA)

A PSPA is Canada Revenue Agency's measure of the benefit increase accruing to you for a prior year often as the result of a purchase of credit for that year. It represents the sum of the additional pension credits that would've been included in your pension credit if the upgraded benefit had actually been provided, or the additional service actually credited. PSPAs don't apply to periods before 1990.

Pension Adjustment (PA)

Canada Revenue Agency's measure of the value of the pension benefit you earn in a calendar year. PAs offset the amount of new RRSP room created each year.

Pension Adjustment Reversal (PAR)

When you receive a termination benefit from the plan and the post-1989 portion of the benefit is less than the pension adjustments (PAs) reported for the same period, a PAR will be issued for the difference.

Pension Benefits Act (PBA)

A pension standards legislation for Ontario with which the Ontario Teachers' Pension Plan must comply.

Pregnancy and parental leave

This type of leave is defined under the Employment Standards Act. Unless teachers waive their right to contribute before beginning their leave, they continue contributing to the plan while on leave.

Prescribed Retirement Savings Arrangement

See LIRA or LIF.

Qualified teacher

A person who holds a valid Certificate of Qualification from the Ontario College of Teachers, or Letter of Permission obtained by his or her employer from the Ministry of Education.

Qualifying factor (85 factor)

Your age plus your qualifying years equal your qualifying factor. Your factor is used to determine when you're eligible for an unreduced pension and to calculate your early retirement reduction. You can begin to receive an unreduced pension when your age plus qualifying years add up to 85.

Qualifying years

A measure of the length of your teaching career. Qualifying years are used to determine when you're eligible for an unreduced pension.

How qualifying years are counted:

Exceptions: When purchasing credit for an employer-approved leave, qualifying service is only counted if you purchase the full amount eligible otherwise qualifying service is counted in actual time. Also, if the first or last year of your teaching career is a partial year, you'll receive credit for the portion of the year worked.

Reduced pension

If you retire before qualifying for an unreduced pension, you can receive a reduced pension provided you're at least 50 years old. An early retirement reduction will be applied.

Reduced workload

A reduction to your normal hours of work that meets the eligibility requirements for reduced workload due to childcare or disability.

Resignation

A resignation is considered valid only if:

• Your employer confirms acceptance of your resignation without condition
• No arrangement has been made to return to work in education, and
• You've either received, or arrangements have been made to pay, any applicable gratuity

Retirement Compensation Arrangement (RCA)

A trust fund created outside the Ontario Teachers' Pension Plan to hold the contributions and pay certain pension benefits which are in excess of the Income Tax Act limits.

Separation agreement

An agreement by two people, who cohabited and have separated, on their respective rights and obligations.

Spouse

Your spouse is your married or common-law partner. A common-law partner must have lived with you in a conjugal relationship for:

• At least three continuous years, or
• A shorter period if you're the parents of a child

Your spouse is automatically entitled to survivor benefits as long as you are not living separate and apart when you receive your first pension payment or at the time of your death if you die before you start your pension.

If you retired before 1990, different rules may apply. A former spouse may also be entitled to a portion of your survivor benefits if assigned in a separation agreement or court order.

Survivor benefits

Your spouse, dependent children, beneficiary or estate are entitled to survivor benefits. The type and amount of benefits depend on your credit, the type of survivor, and whether you die before or after your first pension payment.

Teachers' Pension Act (TPA)

The Ontario legislation governing the pension plan for teachers.

Termination

To terminate your membership in the plan, you must cease to be employed in education, request your termination options from the pension plan and take your money out of the fund.

Unreduced pension

You qualify for an unreduced pension when you reach your 85 factor or age 65.

Year's Maximum Pensionable Earnings (YMPE)

The amount established annually as the maximum amount of earnings on which Canada Pension Plan (CPP) contributions are made.