Your 2019 inflation adjustment

January 11, 2019

In October, we announced the 2019 inflation adjustment is 2.2%, and that all pensions, including post-2009 pension credit, would receive the full adjustment.

Did you retire in 2018? Your first pension increase will be prorated from your last day of credit in 2018.

You can sign in to your Ontario Teachers’ online account to see your new pension amount.

What's with the difference in rates?

Some of you have asked why our cost of living adjustment is often different than the ones reported by the media.

Sometimes the rate we use will be higher and sometimes it’ll be lower than the inflation rates reported in the media. That’s because the media often compares the Consumer Price Index (CPI) for the current month to the same month a year earlier. 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.

Will all pension credit always receive the full increase?

Not necessarily. Our plan sponsors, the Ontario Teachers’ Federation and the Government of Ontario, use inflation protection as a lever to keep plan funding levels sustainable. This means the amount of inflation protection the plan provides on the portion of your pension you earned after 2009 can vary depending on the plan’s funding status during your retirement.

Here’s a breakdown based on when your pension was earned:

  • Before 2010 – this portion will keep pace with the annual increases in the CPI.
  • During 2010-2013 – this portion will receive at least 50% and up to 100% of the annual increase in CPI.
  • After 2013 – this portion will receive from zero to 100% of the annual increase, depending on the plan’s funding status during your retirement.

This mechanism is crucial to ensure our plan’s long-term sustainability.