Disgruntled teachers fight for increased pensions
Compared to most Canadians, Ontario’s teachers enjoy one of the richest pension plans in the country. Longtime teachers, who now contribute an average of 11% of salary towards their pension, can expect to receive about two thirds of what they were making over their last few years of work once they leave the classroom.
But, according to a group of disgruntled retired teachers, along with their widows and widowers, the Ontario Teachers’ Pension Plan isn’t playing fair when it comes to determining how much of this money the spouses of dead plan members should receive.
At issue is OTPP's practice of denying full survivor pensions to those who marry after they retire. Under the current rules, spouses who come along after the plan member retires are entitled to only 10 years of benefits.
If pensioners who marry after retirement want to provide a longer-lasting benefit, they must take a pension cut to obtain a survivors pension for their spouse. The reduced pension is permanent, even if the pensioner outlives their late-in-life spouse.
While a few plans in other provinces have adjusted their survivor formula (unlike most of today's programs, they were enjoying a surplus at the time) to provide full benefits, OTPP won’t budge, arguing that pension amounts are set upon retirement and what happens after that isn't relevant.
What do you think? Would such couples end up collecting beyond what they’re entitled to? Should the numbers change if someone gets hitched later in life?
By Gordon Powers, MSN Money
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