The Teachers’ plan is pre‑funded: it is designed fairly to ensure each generation pays in advance for its own pension benefits. Pension benefits are part of the total compensation package for employees. Employers and employees are partner contributors to the plan. Contributions from employers and members make up approximately 20 per cent of the cost of pensions. The remaining 80 per cent comes from investment returns.
Members who end their employment, retire or reach 35 years of pensionable service stop contributing to the plan. If a member reaches 35 years of pensionable service and continues working, the employer contributes until the earlier of the member’s retirement or the end of the calendar year in which the member reaches age 71.
Members have two key options for maximizing the value of their pension benefit:
Transferring service—moving pensionable service from one plan to another. Members may carry their years of pensionable service and contributions to or from plans with a different employer if that employer has an agreement with the Teachers’ Pension Plan.
More information about transferring service, including a list of agreements currently in place, is available in the Transferring service PensionFacts.
Buying back periods of past service—paying for periods of employment that have not already been counted as service with the plan. This may include approved leaves of absence (pregnancy, parental, compassionate care, general or other approved leaves) or other service (employment service before becoming a contributor to the plan).