Your Ontario Teachers' pension includes annual inflation adjustments to support your buying power throughout retirement. The adjustment rate depends on three factors:
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 it's 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.|
See the impact that the 2019 adjustment has on your Ontario Teachers' pension.