Pension Error Corrected for Retired Teachers

More than 180 retired teachers will receive payments later this month to make up for pension underpayments dating back to 1989. The underpayments were the result of an error made when a computerized pension administration system was introduced in 1988.

"This error was discovered last year," said Finance Minister Neil LeBlanc, whose department administers the Teachers' Pension Plan. "We moved quickly to find out the extent of the problem, to fix it and to ensure the retired teachers receive the money they have coming to them."

The 182 retirees will each receive an explanatory letter and be paid the amount they were underpaid, plus interest. The amounts owed range from a low of less than $2 to a maximum of $11,200. The average is $1,528.

Incorrect data were used as part of a formula to determine the monthly pension payments of teachers who worked part time in the five years prior to their retirement. Although the error only affected this category of teachers, all 4,600 teachers' pensions that were opened between Jan. 1, 1988, and Dec. 31, 1999, were examined. There are 18 overpayments totaling about $600. They range from about $1 to almost $80, with the average being $33. In all cases, the amount of each overpayment represents less than 0.1 per cent of the pension in pay. To minimize the impact on pensioners the overpayments will be recovered at the rate of $10 per month.

"Retirees who rely on their pension income need to be confident that are receiving every dollar they are entitled to," Mr. LeBlanc said. "This is why we checked to make sure the government employees' plan did not have the same error."

The payments to rectify the error will cost $278,000 and will be paid by the Teachers' Pension Plan, which paid out $184 million in benefits in 1998-99.