Pension plans all over the world are under increasing pressure. Aging populations, longer lifespans, low interest rates and market volatility are straining traditional retirement systems.
At Ontario Teachers', we believe defined benefit (DB) pension plans are still the best retirement arrangement, provided they continue to evolve to meet new economic and demographic realities.
DB plans like Ontario Teachers' provide low-cost investing, shared longevity risk, and predictable and adequate retirement income for their members. On top of that, DB plans are usually cost effective. For example, Teachers' investment returns have funded about 78 cents of every dollar paid in pensions since 1990. Shared member and government contributions have funded the rest.
DB Retirees Help Drive Economy
Canadians with defined benefit pensions are far less likely than other retirees to collect government benefits for low-income seniors, study shows.
The Future of Pensions
Ontario Teachers' Evolution