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Originally Posted by WinnipegFan
Sorry when I was referring to the return I meant the amount a teacher receives in pension pay not the market returns. That was my miscommunication. The fund manager does a wonderful job. However, when a teacher retires they only receive a part of their pay and that amount comes to ~4% of the capital they have in the fund. I agree that as teachers live longer they pull more from it. However, with the capital amount they have in the fund it will easily provide the small amount they pull from it as a pension while leaving (take 2015 data you provided) 5.1% staying in the fund. So the capital that teacher was responsible for will easily support them through their retirement.
Not an adviser.
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Sort of. That capital amount also includes all of the employer contributions from over the years, so teachers certainly do get out more than they put in themselves.
That said, I do think teacher contribution rates are often forgotten in discussions regarding their pension. They put in about 12-13% of their gross income into it over a 30-35 year career which amounts to a pretty decent chunk of change. So the pension is generous, but so are their contributions. Not sure of the numbers myself, but I'd be curious to see how someone who contributed that amount to an RRSP over their entire career would fare.