Teachers pension plan in limbo as union seeks to reduce cost
A new proposal from the Ontario Teachers Pension Plan has been put on hold after a federal judge ruled it could lead to a massive cut to pensions for some teachers.
The Teachers Union said in a news release on Wednesday that it will seek a delay of the union’s planned pension plan for teachers from June 30 to August 4.
It said the union would be able to fund the plan through its annual general fund budget, which it said is about $1.5 billion.
But Ontario Superior Court Justice Mark Brossard ruled that would not be enough, and that the union needs to consider “other alternatives” to ensure the plan is sustainable.
Brossard said the plan, which the union called the “fidelity” plan, was not financially sound.
The judge also said that the teachers pension plan had to be considered in the context of Ontario’s “continuing fiscal crisis.”
“The current plan has the potential to be substantially reduced if it is not properly planned and implemented,” he wrote.
The judge’s ruling comes a day after the government introduced a new provincial pension plan, dubbed the “Fidelity” Plan.
That plan is aimed at making teachers’ pensions more affordable and is currently funded by about $2.6 billion from the provincial and federal governments.
Ontario’s chief financial officer said the new pension plan was “more cost effective” than the previous plan, the “simplification” plan.
The government’s plan is expected to save $1 billion annually by 2020, according to the province.