For OPG, GM and Ontario Teachers members
Pension or commuted value? Find the number the decision actually turns on
There is one honest way to compare a lifetime pension against a lump sum: the annual return, net of every fee, that the lump sum must earn to reproduce the pension until you are ninety. This tool solves for that number, then shows you the transfer limit, the taxable excess, and the age the money runs out if markets are ordinary.
Then it does the thing nobody else will: it puts your number side by side with the published, after-all-fees ten-year records of the portfolios we actually manage, so you can see for yourself whether the bar is realistic. Plenty of the people who run this leave with us telling them to keep their pension.
Run my numbersNothing leaves your browser unless you ask us to email the results.
Your numbers
Take them straight off your option statement. Nothing is sent anywhere until you ask us to email the results.
The age you would leave the plan or start the pension.
The yearly amount the plan would pay you for life, before any bridge.
The temporary top-up many plans pay until 65, then stop. Enter 0 if none.
The lump sum figure on your option statement.
Full CPI plans sit near 2%. Conditional or non-indexed plans are lower.
Applied to any commuted value above the transfer limit.
After all fees. Be honest here, this is the whole argument.
Plan to a long life unless you have specific medical reasons not to.
What the numbers say
8.9%
required every year, net of fees, for the lump sum to match the pension to age 90
- Moves tax-sheltered to a LIRA
- $594,000
- Taxable excess paid to you
- $306,000
- Actually invested after tax
- $762,300
- Pension income given up
- $2,260,168
- At 5.0% the lump sum
- runs out at 75
Transfer factor 11.0 at age 58
About $137,700 of tax unless you have RRSP room
$63,000 in year one, $59,932 once the bridge stops
The lump sum has to earn about 8.9% every single year, net of fees, to match the pension to age 90. That is meaningfully more than the 5.0% you told us to assume, so the pension is the stronger deal on these numbers.
Context for your number
Your lump sum would need 8.9% a year. Here is what has actually happened.
Most advisors answer the required-return question with a shrug and a long-term average from a textbook. We would rather show you real, published, third-party-reported records for the portfolios we actually use, and let you judge. These are historical results, not a forecast. They are not a prediction of what any portfolio will earn in your retirement, and nothing on this page is a guarantee of any return.
| Portfolio | Equity | 10-year | Since 2013 | vs your number |
|---|---|---|---|---|
| Income | 21% | 8.03% | 8.22% | below |
| Income Balanced | 30% | 9.74% | 10.10% | above |
| Balanced Growth | 49% | 10.80% | 11.43% | above |
| Growth Balanced | 57% | 12.37% | 13.76% | above |
| All Growth | 65% | 13.43% | 15.74% | above |
Figures are annualised total returns to April 2026 for the Optimize portfolios we use, taken from each published fund report, with the 1.00% account-level portfolio management fee subtracted so the number you see is after all fees and directly comparable to the required return above. The since-inception column runs from September 2013. Past performance does not predict or guarantee future results. Every portfolio shown can and does lose money over shorter periods.
Your number is 8.9% a year, every year, to age 90. The lowest-risk portfolio whose ten-year record sits above that line is Income Balanced, at 9.74% after all fees, with 30% in equities. That does not mean the gap is closed — history is not a promise, and a retirement withdrawal from a real portfolio is a different exercise from a headline return. What it does mean is that the conversation is worth having properly, with the sequence-of-returns risk modelled rather than assumed.
Investment portfolios are managed in partnership with Optimize Asset Management. We are paid the same whether you keep your pension or move it, which is exactly why we are comfortable telling people to keep it.
Now the part the arithmetic cannot see
0 of 7 answeredTwo people with identical option statements should often make opposite decisions. Seven questions, no email required, and you get the reasoning as you go.
Whose plan is it?
The rules and the deadlines differ more than most people expect.
Where are you in the process?
Commuted values expire. Most option statements are only good for a set number of days.
Health and family longevity, honestly?
This is the single biggest swing factor and the one people fudge.
Who depends on this income if something happens to you?
Are your retiree health and dental benefits tied to the pension?
In most large Ontario plans they are, and they usually end the day the cheque does.
Do you have unused RRSP room to absorb the taxable excess?
If you could only have one, which matters most?
What your answers say
Answer a few more and we will tell you which way your own circumstances point, before you speak to anyone.
Private client openings
Want to know if this makes sense for your actual situation?
We keep a short waitlist for new pension reviews. If you'd like to book a consultation, we can see if we can reserve a spot for you and check whether we'd be a good fit. No pressure — we only take on a limited number of new families each quarter.
Request a consultation — we'll find you a slotWe're paid the same either way, so the advice is the only thing that matters.
Five things your option statement will not tell you
1. The transfer limit is not negotiable
The Income Tax Act sets a prescribed factor for your age. Multiply it by your annual lifetime pension and that is the ceiling on what can move to a locked-in account. Everything above it is cash, taxable this year, at your top rate. Long-service members at OPG and GM Canada routinely see excesses in the hundreds of thousands.
2. Indexing is worth more than people think
A pension that rises with inflation is doing something a portfolio can only replicate by taking risk. Drop the indexing assumption in the tool by one percent and watch the required return move. That gap is the price of the guarantee you are handing back.
3. The bridge benefit distorts the early years
Most plans pay a temporary top-up until 65 and then reduce. Comparing a lump sum to your first-year income overstates the pension. Comparing it to your post-65 income understates it. The tool models both.
4. Retiree health coverage usually dies with the monthly cheque
Commute and the group retiree plan generally ends. Price private coverage for a couple in their late fifties before you decide, then add it to the cost column.
5. Fifty percent of a LIRA can be unlocked in Ontario
When the locked-in account is converted to a LIF, Ontario allows a one-time unlocking of up to half the balance, applied for within sixty days. Handled properly, that money moves to an RRSP or RRIF and stays sheltered. Miss the window and it is gone.
Common questions
- What is a commuted value?
- The commuted value is the lump sum a defined-benefit plan calculates as today's actuarial worth of the pension you have earned. It is driven mainly by long-term interest rates, your age, and the plan's indexing and survivor provisions. When rates rise, commuted values fall, sometimes dramatically inside a single year.
- Why can't the whole commuted value go into a LIRA?
- The Income Tax Act caps the tax-deferred portion using a prescribed present-value factor for your age, multiplied by your annual lifetime pension. Anything above that cap must be paid to you in cash and is fully taxable in the year received unless you have RRSP room to absorb it. For long-service members this excess is frequently six figures, and the withholding tax alone can be a shock.
- Can Ontario Teachers members take a commuted value?
- Only before they are eligible to start an immediate pension. Once a teacher reaches the plan's eligibility threshold, the commuted-value option generally disappears and the pension is the only path. That makes the window narrow and the deadline unforgiving, which is why the decision should be modelled well before you resign.
- What happens to my retiree benefits if I commute?
- In most plans, including the large Ontario ones, retiree health and dental coverage is tied to receiving a monthly pension. Take the lump sum and that coverage usually ends. Replacing it privately in your late fifties is one of the largest and most commonly ignored costs in the whole decision.
- Is it true I can unlock 50% of a LIRA in Ontario?
- Yes. Ontario permits a one-time unlocking of up to 50% of a locked-in account when it is transferred to a Life Income Fund, applied for within 60 days of the transfer. The unlocked portion can move to an RRSP or RRIF, which means it stays tax-sheltered but becomes fully flexible. It is a powerful planning lever and it is easy to forfeit by missing the window.
- Is the pension safe if my employer struggles?
- Ontario plans are funded and regulated, and the province operates the Pension Benefits Guarantee Fund for wind-ups, subject to limits. Some employers have also transferred obligations to insurers through annuity buyouts, which changes who pays you but not what you are owed. Fear of the sponsor is rarely, on its own, a good reason to commute.
This calculator is an educational estimate. Prescribed transfer factors, plan indexing, survivor terms and tax rates change, and every plan has its own rules. Confirm figures with your plan administrator and get advice specific to your situation before making an election. Commuting a pension is generally irreversible.