Cost and payment options

For a full-time teacher with a salary of around $78,000, making up for a year's gap in your pension typically costs about $10,000.

If you're like a typical teacher, paying for that $10,000 leave could increase your pension by about $1,880 each year. 

Most of our retired members collect a pension for about 30 years, so paying for that leave today could mean you'll get as much as $56,000 more throughout your retirement. 

A few things to keep in mind:

  • Your pension is about as close to a guaranteed investment as you can get. When you retire, your monthly payments will be determined by a formula, not the ups and downs of the market.
  • You can pay for as little or as much of your leave as you want. You’ll receive service credit that is proportional to the amount you've paid.
  • You have up to five years from the end of your leave or up to the date of your first pension payment (whichever comes first) to pay.
  • If you decide to pay for your leave, it’s best for you to tell us by April 30 of the calendar year following the year your leave ends. This'll make your tax situation less complicated.

The cost

Let’s say you took one year away from full-time work. Your salary, as reported by your employer, was around $78,000 before your leave. To get a rough ideas of how much your leave would cost, multiply the salary you earned before your leave by the contribution rate(s) for the leave period you're paying for (2018's contribution rate is 12%).

$78,000 X 12% = $9,360 plus interest

Please enter a value between $40000 - $150000 (no commas or spaces). Please enter numbers and comma only.

How long will your leave be?

  • 1 month
  • 6 months
  • 12 months
  • 18 months
  • 24 months

Your XXX month leave will cost around:

$10,218 (plus interest)*

$170/month over 5 years (plus interest)*

DISCLAIMER

This calculator provides an estimated cost of your employer-approved leave. This is not your final cost. Your final cost factors in your total salary prior to going on leave, as determined under the terms of the plan. It also factors in the contribution rate(s) for the year(s) you were away from work, as well as your assigned salary, which is determined by the Ministry of Education. 

This is just one example of a payment plan option. You can make a payment towards your leave any time before your leave's payment deadline. 

*The interest rate, including any increases or decreases, is also not included in this estimated cost.

Factors that affect your leave's cost

cost icon

1. Contributions

We multiply the salary associated with what you would've earned if you had worked (which is based on your salary before your leave) by the contribution rate(s) for the year(s) you have been away. The amount will be slightly more than what you would’ve contributed to the plan if you had continued to work.

assigned salary icon

2. Assigned salary

If your leave spans school years, we base your assigned salary (what you make contributions on) on the salary you earned before your leave. Each new school year, we apply increases that are determined by the Ministry of Education.

interest icon

3. Interest

Interest will be applied to the cost of your buyback beginning the first of the month following the end of your leave.

When to pay

You have up to five years from the end of your leave to pay, or up to the date of your first pension payment (whichever comes first).

When you make a payment in cash (online banking or cheque), you could be eligible for a tax deduction for the calendar year you make the contribution. The amount of the deduction will depend on how much taxable income you generated in the calendar year (we'll send you a tax receipt in February for any payments made in the previous year).

For example, let's say teaching is your only source of employment income, and you returned to work in September 2017 after being away for a year. Your tax deduction would only apply to four months of salary.

When your leave starts

The Buyback Centre in your online account will show you the maximum lump-sum you can pay in a calendar year. You can't prepay for the portion of a leave that extends into future calendar years.

During your leave

  • Your leave doesn't incur interest. 
  • You can start making payments as soon as we tell you the cost of your leave, but you may want to talk to a tax advisor first.

When your leave ends

  • Interest starts once your leave ends.
  • Our interest rates have recently hovered below 2%, but can change, and may increase, before you finish paying for your leave.

When you return to work

  • We'll send you a tax receipt in February for any payments made with online banking or cheque in the previous calendar year.
  • You can use that receipt to claim a deduction on your tax return.
  • You have until April 30 of the year following the end of your leave to let us know if you want to pay. So, if your leave ended in 2017, let us know if you’d like to pay by April 30, 2018.

Five years to pay

You have up to five years from the end of your leave to pay, or up to the date of your first pension payment (whichever comes first).

How to pay

Pay for your leave with cash (online banking or cheque), RRSPs or a combination of both. You can’t pay with a credit card or through payroll deduction.

  • Online banking
  • Cheque
  • RRSP

Pay with online banking

  • Many of your colleagues use online banking to pay in multiple installments.
  • Payments must be made from your personal or joint bank account.
  • We’ll send you a tax receipt by the end of February each year for the payments you made in the previous calendar year. Use this to claim a deduction on your tax return for the previous year.

To pay online

  1. Ensure you’ve told us that you plan to pay for your leave.
  2. Log in to your bank account.
  3. Set up "Ontario Teachers' Pension Plan" as a payee and enter your nine-digit Ontario Teachers' account number.

Pay with cheque

  • Payments must be made from your personal or joint bank account.
  • We’ll send you a tax receipt by the end of February each year relating to the payments that you made in the previous calendar year. You can use this to claim a deduction on your tax return for the previous year.

To pay by cheque

  1. Ensure you’ve told us you plan to pay for your leave, and you've received a cost from us.
  2. Make your post-dated cheque(s) payable to the Ontario Teachers' Pension Plan.
  3. Write your nine-digit account number on the cheque.
  4. Mail your cheque to:
    Ontario Teachers' Pension Plan
    5650 Yonge Street
    Toronto ON M2M 4H5
Example Cheque

Pay with RRSPs

  • A transfer can take up to six weeks.
  • You could take a hit on high administration fees from your financial institution.
  • You won't get a tax break – you’re moving money from one type of tax-sheltered retirement plan to another.
  • You won’t regain RRSP contribution room for the amount you’re putting towards your leave.

To transfer funds from your RRSP

  1. Complete the T2033 Direct Transfer form with your financial institution.
  2. Have them mail the form with the transferred funds to:
    Ontario Teachers' Pension Plan
    5650 Yonge Street
    Toronto ON M2M 4H5

Getting started

Once you or your employer inform us of your leave, we'll update your Buyback Centre. Once we have it on record, paying for it is simple:

  1. Visit your Buyback Centre
  2. Tell us if you plan to pay for your leave. We need to know by April 30 of the calendar year following the year your leave ends.
  3. Start making payments