Commission on the Reform of Ontario's Public Services

Chapter 6: Elementary and Secondary Education
Recommendation 6-26: To mitigate further increases, the province should, in future
discussions with the Ontario Teachers’ Federation, reject further employer rate increases to
the Teachers’ Pension Plan beyond the current rate, and instead examine which benefits
could be reduced prospectively to make the Plan more affordable and benchmark any
changes to the provisions contained in other plans.
As well, the province should not agree to contribute more to the Plan than teachers, including
additional payments in respect of forgone inflation adjustments to retirement benefits.
The province should also consider increasing the average age of retirement. Under the terms
of the Plan, teachers can retire as young as age 50. 38 This is possible because plan members
can qualify for a reduced retirement pension once they are 50 years of age and have two or
more qualifying years of service. While a few teachers do retire this early, the average
retirement age in 2010 was 59. According to the TPP Board’s 2010 annual report, the typical
teacher works 26 years and collects a pension for 30 years. Given the general increase in
longevity in Canada in recent decades, raising the average retirement age would reduce plan
liabilities and help alleviate the need to reduce benefits in the future. For a broader discussion
of pensions, please see Chapter 19, Liability Management.
38 According to the OTPP/TPP website, the pension is defined by a formula that takes into account average salary and credit. For
participating teachers who have at least two qualifying years, they are eligible for an unreduced pension when they reach age 65 or their
85 factor (age + qualifying years = 85 factor). The basic annual pension is: 2 per cent X credit X best-five years’ average salary. For more
information, refer to www.otpp.com.
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