Exceeding Re-Employment Limits

Case

A member contacts OECTA provincial office because the Ontario Teachers’ Pension Plan (OTPP) board is demanding that the teacher repay $7,000 for “exceeding re-employment limits” during May and June. The teacher says the pension board is mistaken because the teacher stopped accepting occasional teaching assignments in April to comply with the 50-day rule. Instead, the member earned $700 during May and June, tutoring students in a home schooling program, and was careful not to do any occasional teaching.

Advice

The member contravened the Pension Benefits Act by not stopping their pension while they continued to work for a school board after completing 50 days of employment. Even though the teacher was not teaching in a regular classroom program the tutoring was part of a home schooling program run by the school board. The member mistakenly thought that occasional classroom teaching was the only work subject to these limits.

As a result, according to the terms of the Pension Plan Act, the member will forfeit pension income for those two months. The Ontario Teachers' Pension Plan (OTPP) limitations are as follows:

• The 50-day provision limits the time within an instructional year a retired member can be employed in education in Ontario. This rule allows a teacher to complete the month in which they exceed their 50th day of employment.
• The re-employment limits apply to any employer that participates in the OTPP, which includes schools boards in Ontario, designated private schools, and designated organizations.

Before you accept employment, ask if the employer participates in OTPP, or contact OTPP. If you decide to work beyond the limits, you are advised to notify OTPP as soon as you start working after the month in which you exceed the limit. Your pension will be suspended for each month you continue to work beyond the limit. Your pension resumes without change the month after your last day of re-employment.

Discussion

Each year the Association receives calls like this from teachers who are asked to reimburse the OTPP because they have exceeded the re-employment limits.

Re-employment is not limited to occasional teaching, which is the point of contention in this scenario. The definition includes all re-employment, teaching or non-teaching, whether done on an employment, self-employment or third-party basis. In this case the retiree was paid for the tutoring work, which constitutes employment by the board.

If the position or duty entitles you to compensation and you decide to decline it, your service will still count toward the re-employment limit. You can't forfeit your pay to circumvent the rules. Other teachers have forfeited income when attempts have been made to conceal employment. Sometimes, in order to circumvent the 50-day limit, school administrators did not report additional days that a teacher worked. These arrangements are illegal and the school board is bound by the legislation to report all re-employment for pension purposes to the OTPP. As a result, some retirees have lost substantial pension income when the school board reported their actual re-employment.