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Understanding your inflation adjustment

Your Ontario Teachers’ pension includes annual inflation adjustments to support your buying power throughout retirement.

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Your 2025 inflation adjustment

The annual cost-of-living adjustment for 2025 is 2.7%. The adjustment takes effect in January 2025.

The adjustment is based on 100% of the adjustment in the Consumer Price Index (CPI), a weighted basket of goods and services typically purchased by Canadian households each month.

What this means to you

  • In January 2025, you’ll receive a pension increase equal to 100% of the annual CPI increase.
  • If you retire(d) in 2024, your first pension increase will be prorated from your last day of credit in 2024.

How we calculate your adjustment

The calculation method we use is set in the Teachers’ Pension Act. It’s the same method used by most other major Ontario pension plans, as well as the Canada Pension Plan (CPP).

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 adjustment from year to year. This is why you may notice a discrepancy from news reports that give a month-to-month snapshot.

For a detailed breakdown of how the inflation adjustment is calculated, read our FAQs.

Factors affecting your adjustment

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

We use the 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 creditInflation protection levelWhat it means after you retire
Before 2010100%This portion of your pension will keep pace with annual increases in the CPI.
During 2010-201350% 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 20130% 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.