SPECIAL Update on Teacher Pension Plan
The Ontario Teachers’ Pension Plan has lots of money in the fund, but...
The future security of the jointly sponsored Ontario Teachers’ Pension Plan (OTPP) is not in doubt. Featuring matching contributions from the Ontario government, it is a well-run plan with net assets totalling $107.5 billion as of January 1, 2011. Because it is a defined benefit plan, the OTPP promises a certain level of income for as long as pensioners (or their eligible survivors) live. A complex actuarial process is necessary to determine whether today’s contributions and investment income will fund tomorrow’s pension promise for current contributors. Each year, an independent actuary prepares a financial assessment of the Plan, based on best-estimate assumptions, examining the assets and liabilities of the Plan, projecting 70 years into the future. This “valuation” is presented to the Partners, the Ontario Teachers’ Federation (OTF) and the Ontario Government, who then must decide whether or not to “file” that valuation with the regulators. If they decide to fi le the valuation, it must be fully funded. Legally, public pension plans must file a balanced valuation at least every three years. Filing can occur sooner, if the Partners decide it is in the best interests of the members.
READ THE COMPLETE UPDATE BY DOWNLOADING THE PDF ATTACHMENT BELOW.