Your 2018 inflation increase

December 14, 2017

The 2018 inflation rate is 1.6%. As announced earlier this year, all pension credit will receive 100% inflation protection for 2018.


In March 2017, the partners announced a preliminary $11.5 billion funding surplus. Some of this surplus is being used to fully restore cost-of-living increases for the portion of pensions earned after 2009. Here’s what this change means for your 2018 inflation increase:

  • In January 2018, you’ll receive a pension increase equal to 100% of the annual increase.
  • If you retired after 2009, your pension will be restored to the level it would be at if 100% inflation protection had been provided on January 1, 2017.
  • If you retired in 2017, your first pension increase will be prorated from your last day of credit in 2017. 
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. You’ll be able to see your new net amount in your online account by about the third week of the new year.

Myth busters

Let’s set the record straight on some of the myths surrounding inflation protection.

Myth #1

Pension credit earned after 2009 isn’t protected against inflation.


It depends on the plan’s funding status. The portion of your pension earned before 2010 will keep pace with annual increases in the CPI. The portion of your pension earned during 2010-2013 will receive at least 50% and up to 100% of the annual increase in CPI, and the portion of your pension earned after 2013 will receive from zero to 100% of the annual increase, depending on the plan’s funding status.

The ability for our plan partners to raise and lower inflation protection on post-2009 credit has helped to keep your plan strong. If all pensions received full inflation protection, we would’ve projected funding shortfalls. Instead, we’ve projected surpluses for the past four years. 

Myth #2

I can bank inflation protection for future years. So, if inflation protection was 90% in 2017, then the service I earned in 2017 will always receive 90% inflation protection.


No, you can’t bank inflation protection. Every year we check our financial health to ensure we can pay pensions for your lifetime and beyond. Some years will be better than others. Our plan partners adjust inflation protection in times of funding surpluses and shortfalls. Without this ability to adjust inflation protection on post-2009 credit, we would’ve faced shortfalls totaling around $50 billion.

The partners have also used surpluses to make up for years you didn’t receive full inflation protection.

Myth #3

My pension will be reduced during periods of funding shortfalls.


Current Ontario legislation protects the value of pension benefits already earned by working and retired members. Under the Pension Benefits Act, whatever benefits you’ve accrued or earned to date in your career can’t be reduced. 

Watch the video below to see how inflation protection keeps your pension in tune and plan from missing a beat.