The annual cost-of-living adjustment for 2012 is 2.8%. If you retired before 2010, you will receive 100% of the adjustment. If you retired after 2009, your annual increase will be based on two components:
- 100% of the adjustment for the portion of your pension credit earned before 2010, plus
- 60% of the adjustment (1.68%) for the portion of your pension credit earned after 2009.
The Ontario Teachers' Federation (OTF) and Ontario government, which jointly sponsor the pension plan, invoked conditional inflation protection to help address the 2011 funding shortfall. Starting with the 2012 inflation adjustment, pensioners who retired after 2009 will receive 60% of the annual cost-of-living increase on the portion of their pension credit earned after 2009.
The increase takes effect in January and is based on 100% of the increase in the Consumer Price Index (CPI), a weighted basket of goods and services typically purchased by Canadian households each month. It will increase a typical $37,000 annual pension by $1,036.
The inflation increase is determined by comparing the average CPI for the 12-month period ending in September to the previous 12-month average. The method used to calculate the increase is prescribed in the Teachers' pension plan and is the same method used by most other major Ontario pension plans, as well as the CPP.
Here's how the increase will affect different pension amounts based on 100% inflation protection:
| Annual pension | Increase in 2012 | Annual pension | Increase in 2012 |
| $15,000 | $420 | $40,000 | $1,120 |
| $20,000 | $560 | $45,000 | $1,260 |
| $25,000 | $700 | $50,000 | $1,400 |
| $30,000 | $840 | $55,000 | $1,540 |
| $35,000 | $980 | $60,000 | $1,680 |
If you left teaching in 2011, the 2012 increase will be pro-rated to the number of months after you stopped working.