How much will my pension increase each year?
Your pension will keep pace with 100% of the increase in the cost of living, as measured by the Consumer Price Index (CPI). The CPI, calculated by Statistics Canada, is the most widely used measure of inflation in Canada. It measures the percentage change, over time, of a weighted basket of goods and services purchased by a typical consumer. The all-index CPI we use measures 600 items, including food, shelter, housing, transportation, health and personal care, clothing, recreation, and alcohol and tobacco.

What is the latest increase?
The annual cost-of-living adjustment is determined in late October and takes effect in January. To see what the latest increase is, read 2012 Inflation Increase.

Why do increases vary from reported inflation rates?
Many pensioners wonder why their annual increase seldom matches the rate of inflation reported in the media. Sometimes it will be higher and sometimes it will be lower. That's because the media compares the CPI for the current month to the same month a year earlier. We compare the average monthly CPI for the 12-month period ending in September to the 12-month average a year earlier, effectively smoothing the increase from year to year.

Is there a limit on annual increases?
Increases are capped at 8%. If inflation is greater than 8%, the excess amount is carried forward to a year in which inflation is less than 8%.

What happens if inflation falls below zero?
The same type of limit applies for pension adjustments in the case of "negative" inflation (or deflation) as with positive inflation.

If inflation is less than 0%, pensions remain at their current levels and the percentage below zero is carried forward to a year in which inflation is positive.

How do you calculate the increase?
We follow a three-step process to determine your annual cost-of-living adjustment.

Step 1: Calculate inflation factor
We compare the average monthly CPI for the 12 months ending in September to the 12-month average a year earlier. We then divide the two averages to get the inflation factor. Here's how the factor was determined for the 2012 cost-of-living increase.

Step 2: Apply factor to your pension
To arrive at your new before-tax pension, we multiply your current pension by the inflation factor. Here's how the factor will increase the 2012 pension of a member collecting an average $37,000 pension.

Member's pension X inflation factor = New before-tax pension
$37,000 X 1.028 = $38,036

Step 3: Convert factor to a percentage
To communicate the size of the increase, we convert the factor to a percentage. Here's how the factor is expressed as a percentage, using the 2012 inflation adjustment.

(2012 inflation factor – 1) X 100 = Percentage increase in 2012
(1.028 – 1) X 100 = 2.8%

How much has my pension increased over the years?
Sign in to iAccess Web, the secure members-only section of this website, to see how much your pension has grown over the years as a result of annual inflation adjustments. If you aren't yet registered for iAccess Web, consider signing up. All you need is five minutes and an active e-mail account.

Since inflation protection was introduced in 1976, the annual increase has averaged 4.3%, while increases in the last 10 years have been modest because of low inflation rates.