The deal announced Friday will see contributions stay where they are for a five-year period ending December 2017 if new deficits arise, a spokesman for Finance Minister Charles Sousa said Friday.
Individual working teachers will still see their contributions rise to 13.1 per cent of salary as of Jan. 1, 2014, from 12.75 this year, but they'll stay at that level until at least the end of 2017, Finance spokesman Darcy McNeill said.
The Ontario Teachers Pension Plan Board administers about $117 billion in assets to fund retirement for about 300,000 active and retired teachers.
But the investment returns in the fund haven't been able to cover all the pension obligations which have been driven up by low interest rates, leaving the sponsors with a huge shortfall to overcome.
Under the previous framework, the two sides agreed to close the pension gap — which was $9.6 billion at the end of 2012 — by eliminating inflation guarantees and increasing contributions.
In last year's budget, the Ontario government allocated $1.456 billion in cash and booked an $850-million actuarially adjusted accounting expense related to its share of the contributions.