Your Ontario Teachers' pension includes annual cost-of-living adjustments to support your buying power throughout retirement. These adjustments are determined each year after you retire and are reflected in your pension every January. 

Cost-of-living adjustments apply to retirement pensions, deferred pensions, disability pensions and survivor pensions.

Here are the three key factors on which your annual inflation adjustment will depend:

1. The changes in the cost of living in a given year, as measured by CPI

We use the Consumer Price Index (CPI) because it's prescribed by the terms of the plan and is the most widely-used indicator of price changes in Canada. The CPI represents a weighted basket of goods and services typically purchased by Canadian households each month.

2. The plan's funding status

We use inflation protection as a lever to keep the plan sustainable. When the plan has a funding shortfall, smaller cost-of-living adjustments help to bring the plan back into balance. When there's a funding surplus, inflation levels may be partially or fully restored.

3. When you earned your pension credit

There are three levels of inflation protection and they're based on when you earned pension credit: before 2010, during 2010 to 2013, and after 2013.

When you earned your pension credit Inflation protection level What it means after you retire
Before 2010 100% This portion of your pension will keep pace with annual increases in the CPI.
During 2010-2013 50% to 100% This portion of your pension will receive at least 50% and up to 100% of the annual increase in the CPI, depending on the plan's funded status.
After 2013 0% to 100% This portion of your pension will receive from zero to 100% of the annual increase in the CPI, depending on the plan's funded status.

The bottom line

  • Your annual cost-of-living increase is determined each year after you retire.
  • You don't bank or accumulate a particular level of inflation protection while you work.
  • You'll receive 100% inflation protection for pension credit you earned before 2010.
  • You'll receive a variable amount of inflation protection for pension credit you earned after 2009, depending on the plan's ability to pay for it.