# Ontario Teachers' Pension Plan
**Ontario Teachers' Pension Plan** (OTPP) is a Canadian defined-benefit pension plan for Ontario's teachers, funded through member and government contributions and invested by Ontario Teachers' Pension Plan Board, a corporation without share capital created under the Teachers' Pension Act and co-sponsored by the Ontario government and the Ontario Teachers' Federation.[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf) Its net assets reached $279.4 billion at the end of 2025, up from $20.1 billion in 1990.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf)
| Key fact | Detail |
|---|---|
| Net assets | $279.4 billion at end of 2025, from $20.1 billion in 1990[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) |
| Funded status | Funding-valuation assets of $324.1 billion against $292.9 billion in obligations as of January 1, 2026, a $31.2 billion surplus; fully funded for the 13th consecutive year[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) |
| Contributions | Active members who are required to contribute to the Canada Pension Plan contribute 10.4% of earnings up to the YMPE and 12.0% above it, matched by the Province and designated employers[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf) |
| 2025 return | 6.7% total-fund net return against an 11.7% benchmark, a $12.0 billion negative value add; 10-year net return 6.8%[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) |
| Funding source | Almost 80% of pension funding since 1990 has come from investment returns[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) |
| Investment costs | $1,950 million in 2025, or 71 cents per $100 of average net assets, down from 80 cents in 2024[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) |
| Governance | Board of up to eleven members appointed by the Ontario Teachers' Federation and the Ontario government, required to act independently of sponsors and management[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf) • [2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) |
## What the plan is and who it serves
The plan is a contributory defined benefit plan co-sponsored by the Ontario government and the Ontario Teachers' Federation (OTF). Under the Teachers' Pension Act, Ontario Teachers' is constituted as a corporation without share capital to which the Corporations Act does not apply.[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf)
The scale of the enterprise has grown steadily. Net assets available for benefits were $279.4 billion in 2025, up from $266.3 billion in 2024, and have grown from $20.1 billion in 1990.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) In the 2025 Top 100 Pension Funds ranking, OTPP ranked first among Canadian funds with 2024 net assets of $260,854.0 million, up from $243,923.0 million in 2023.[3](https://lpfcec.org/wp-content/uploads/2025/08/Top-100-Pension-Funds_2025.pdf)
## How the pension is funded
**Contributions.** Active members who are required to contribute to the [Canada Pension Plan](https://www.edgepedia.org/canada-pension-plan) contribute 10.4% of earnings up to the Year's Maximum Pensionable Earnings (YMPE) plus 12.0% of earnings over the YMPE, matched by the Province and designated employers.[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf) Contributions are the smaller half of the money: since 1990, almost 80% of the plan's pension funding has come from investment returns, with the remainder from member and government, or designated-employer contributions.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf)
**Smoothing and assumptions.** Funding valuations smooth asset gains and losses over a three-year period, with one-third recognized immediately and the remaining two-thirds in equal installments over the following two years.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) A funding valuation must be filed with regulators at least every three years.[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf) The current funding assumptions are a 2.00% long-term inflation rate, a 2.65% real discount rate, and a 4.70% nominal discount rate; OTPP targets a 7% annual nominal return to keep the plan fully funded over the long term.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf)
**Conditional inflation protection.** The sponsors introduced conditional inflation protection (CIP) in 2008, recognizing that if significant investment losses or a funding shortfall occurred, an increase in contribution rates alone was unlikely to be sufficient.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) CIP makes the inflation increase for benefits earned after 2009 conditional on funded status, while pension credit earned before 2010 remains fully indexed; the plan describes it as adding flexibility and promoting intergenerational equity.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) When CIP is invoked, the Province and designated employers make additional contributions covering the first 50% of foregone inflation, the difference between the inflation adjustments paid and those that would have been paid without CIP.[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf) Actuarial gains, when they arise, may be used to enhance benefits, reduce contribution rates, restore CIP pensions, or be held as a contingency reserve.[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf)
## The investment organization and strategy
The Statement of Investment Policies and Procedures (SIPP) sets permitted asset-class exposure ranges: equities 30–50% (midpoint 40%), fixed income 0–67% (midpoint 34%), inflation-sensitive assets 15–25%, and real assets 18–32%.[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf)
Within those ranges, the 2025 asset mix included real estate of $27.9 billion (10% of net assets) and infrastructure of $34.5 billion (13%).[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf)
**Costs.** Total investment costs for 2025 were $1,950 million, or 71 cents per $100 of average net assets, down from $2,079 million (80 cents) in 2024.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) [Management](https://www.edgepedia.org/management) fees, including performance fees, were $658 million (24 cents per $100) in 2025, down from $874 million (34 cents) in 2024 due to lower base and performance fees; administrative expenses were $926 million (34 cents).[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf)
## By the numbers
The 2025 result was a marked shortfall against the fund's own benchmark. The portfolio earned a 6.7% total-fund net return against a benchmark return of 11.7%, a negative value add of 5.0% or $12.0 billion.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) Over ten years the total-fund net return was 6.8%.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf) The 2023 return, for context, was 6.9% in the Top 100 ranking.[3](https://lpfcec.org/wp-content/uploads/2025/08/Top-100-Pension-Funds_2025.pdf)
The funding valuation nonetheless shows a surplus. As of January 1, 2026, on a preliminary basis, funding-valuation assets totalled $324.1 billion against future pension obligations of $292.9 billion, leaving $31.2 billion in reserve, and the plan remained fully funded for the 13th consecutive year.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf)
## How it compares with CPPIB, CDPQ, PSP, and OMERS
Among Canada's eight largest pension investment managers, CPPIB is the largest at $793.3 billion in net assets, followed by CDPQ at $517.3 billion, PSP at $320.6 billion, OTPP at $279.4 billion, and OMERS at $145.2 billion.[4](https://maple8.ca/compare/) These funds are commonly grouped under the label of the Canadian pension model, though that term has no universally accepted definition beyond referring to Canada's larger public pension funds.[5](https://www.top1000funds.com/wp-content/uploads/2017/12/The-Evolution-of-the-Canadian-Pension-Model-All-Pages-Final-Low-Res-11_13.pdf)
On 2025 returns, OTPP's one-year net return of 6.7% trailed CPPIB's 7.8%, CDPQ's 9.3%, and HOOPP's 7.7%, and its 10-year return of 6.8% trailed the 8.8% reported by CPPIB and PSP.[4](https://maple8.ca/compare/) The 2025 one-year value add of -5.0% was similar to CPPIB's -5.4% and PSP's -5.2%, but worse than CDPQ's -1.6%, OMERS' -1.5%, and BCI's -0.9%.[4](https://maple8.ca/compare/) Where OTPP leads the peer group is funded status: it is the only large plan in this comparison with a 111% funded ratio, ahead of HOOPP at 109% and OMERS at 99%.[4](https://maple8.ca/compare/)
In the first half of 2026, OTPP reported net assets of $303.2 billion with a +9.5% net return over six months, against CPPIB's $863.6 billion (+7.5% for Q1 fiscal 2027) and CDPQ's $552 billion (+5.1%).[4](https://maple8.ca/compare/)
## Governance and accountability
The Partners, the Ontario government and the OTF, appoint a maximum of eleven individuals to serve as board members of Ontario Teachers'.[1](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf) Board members are required to act independently of both the Plan sponsors and management, deciding in the best interests of all plan beneficiaries.[2](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf)
## References
1. [Statement of Investment Policies and Procedures (SIPP), Ontario Teachers' Pension Plan Board](https://www.otpp.com/content/dam/otpp/documents/reports/Schedule%20A%20-%20Statement%20of%20Investment%20Policies%20and%20Procedures.pdf)
2. [Ontario Teachers' Pension Plan 2025 Annual Report](https://otpp.com/content/dam/otpp/documents/reports/2025-ar/otpp-2025-annual-report-eng.pdf)
3. [Top 100 Pension Funds 2025, CPE ranking](https://lpfcec.org/wp-content/uploads/2025/08/Top-100-Pension-Funds_2025.pdf)
4. [Maple 8 Pension Fund Comparison (AUM, Returns, Funded Status)](https://maple8.ca/compare/)
5. [The Evolution of the Canadian Pension Model, top1000funds.com](https://www.top1000funds.com/wp-content/uploads/2017/12/The-Evolution-of-the-Canadian-Pension-Model-All-Pages-Final-Low-Res-11_13.pdf)
6. [2025 Report on the Funding of Defined Benefit Pension Plans in Ontario, FSRA](https://www.fsrao.ca/media/30006/download)
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*Topic: Encyclopedia › Society and history › Economics and business › Finance › Investment banking and asset management › Investment funds and vehicles*
*Initially written Sep 17, 2026 · Reviewed: Sep 30, 2026; Oct 10, 2026 · Edited: Sep 30, 2026; Oct 10, 2026; Oct 11, 2026 · Last review: Oct 10, 2026*
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License: Edgepedia Community License 1.0, https://www.edgepedia.org/edgepedia/license