Occasional teaching and your pension
June 13, 2012
It's hard to think about retirement when you're trying to get your full-time teaching career off the ground, says Sedannia D'Amico, an occasional teacher.
Sedannia started teaching a little over two years ago in the city of Vaughan. So far a full-time position has eluded her. She's not alone though. It's common for new teachers to start out on an occasional basis before transitioning to full-time status.
Sedannia says she has dreamed of being a teacher since high school. While at school she worked at a grocery store and then a bank. In both positions she contributed to a pension plan. These days she's striving to find a full-time teaching position that will offer her both long- and short-term stability. But most importantly, she's anxious to have a classroom of her own, where she can establish meaningful connections with students, which is tricky to do while supply teaching.
"I have a lot of friends that are in the same boat," she says. "I only recently started wondering what my occasional status will mean for my pension. A colleague asked me if being an occasional teacher would affect my retirement income, or the date I'm eligible to retire. It was then I realized I didn't have these answers."
Here are three common questions asked by occasional teachers when it comes to their pension plan.
1. What's the difference between qualifying years and actual credit?
It's understandable that new teachers focused on launching their full-time careers often don't have the ins-and-the-outs of their pension plan on their radar.
Think of it this way: qualifying years are a measure of the length of your career, and actual credit is a measure of the exact amount of time you spent teaching. Qualifying years are used to determine when you're eligible to retire with an unreduced pension. Actual credit is used to determine the value of your pension.
2. How do I build qualifying years and actual credit?
Sedannia anticipates it will take her five years before she settles into a full-time position. She wants to know if those five years of occasional teaching will delay her retirement, or lower her retirement income.
To gain one qualifying year you need to work more than 10 days in the school year.
Once you reach your qualifying factor, you can retire with an unreduced pension. With qualifying years, it's possible for members who have worked less than full-time during their careers to be eligible for an unreduced pension at the same time as a member who has worked full-time for their entire career.
Actual credit is based on the amount of time you spent teaching. When you work less than full time, you receive credit for only the time you work and contribute to the plan.
So, if Sedannia supply teaches for 103 days during a 194-day school year, she will earn one qualifying year and credit for 103 days for that year. Sometimes actual credit is shown as a percentage of a school year (103 days of a 194-day school year would be shown as 0.53). OTPP uses this figure in the formula that determines benefits.
3. How else can I increase credit in the plan?
While Sedannia worked to put herself through school, she was able to contribute to pension plans. She has three options to explore when it comes to transferring this credit into Teachers'.
OTPP has transfer agreements with teachers' pension plans in every province, and with the Major Ontario Pension Plan System (MOPPS). There are 15 plans within MOPPS, all of which are employers in Ontario's public sector.
If Sedannia's credit doesn't qualify to be transferred under those options, she can explore buying credit from other employment.
Buying credit for other employment can be expensive, but the option is worth considering. The idea is that by consolidating pension contributions under one plan, the whole may be worth more than the sum of its parts.