Pension Proposal Approved by OTF Today

The Ontario Teachers' Federation (OTF) Executive today approved the proposal for addressing the funding deficit in the OTPP that was outlined in the OTF Communiqué dated September 23, 2008. The proposal includes 50% conditional indexation of the inflation protection on your pension for service earned after 2009.

On Monday September 29th, a special meeting of the OTF Board of Governors was convened to endorse the proposal. ETFO Governors attended to express opposition to the proposal and raised grave concerns about procedural and policy issues. The fundamental issues raised by ETFO were not addressed and, in the best interests of our members, the ETFO representatives withdrew from the meeting.

Members should be aware that the ETFO provincial Executive did not endorse the proposal for the following reasons:

• It ends a decades long promise to provide fully indexed pensions to all retired teachers;
• It creates two classes of retirees, those with fully indexed pensions and those with partially indexed pensions, reminiscent of the way the Social Contract unjustly affected teachers on the grid; and
• It creates an inherent conflict between active teachers and retirees.

Subsequent to the adjournment of the Board of Governors, the OTF Executive approved the proposal. The OTPP will now file a valuation based upon the proposal. As of January 1, 2009, pension contributions will increase, as previously scheduled, by 0.8% to 10.4%/12%.

The funding status of the Plan at the next valuation, which must be filed no later than 2011, will determine whether further changes are required in the contribution rate or if conditional indexation is applied to the portion of pensions that are accrued after 2009.

No one should change their retirement plans based on approval of this proposal. These changes do not affect the pensions of current retirees nor do they affect the 100% guaranteed indexing of service earned before 2010.

David Clegg
Provincial President
Elementary Teachers' Federation
of Ontario

This Pension Communiqué (PDF, 700 kb) from OTF provides additional detail on the proposal that was passed today.