November 11, 2005
All OPTrust pensions
will increase by 2.2%, starting in January 2006. The pension adjustment
reflects changes to the cost-of-living as measured by Canadaís Consumer
Price Index (CPI).
The OPSEU Pension Plan provides for annual pension increases to protect
the value of all OPTrust pensions against inflation. This important feature of the plan means that your OPTrust pension will increase annually to keep pace with inflation.
The annual increase applies to all current pensions, including those paid
to retired OPTrust members and survivors. For individuals who started to
receive a pension in the previous calendar year, the first annual increase
is prorated based on the month their pension began.
The maximum escalation
in any single year is 8%. Any increase above this level is carried forward
and applied in the next year in which the adjustment is less than 8%.
The annual inflation adjustment also applies to the deferred pensions of
former and divested members who are entitled to receive an OPTrust pension
in the future.
How the annual increase is calculated
OPTrustís annual pension escalation factor is calculated based on changes
in the average CPI for two 12-month periods ending the previous September.
The 2006 escalation factor was calculated as follows
|Average CPI for October 2004 to September 2005
Average CPI for October 2003 to September 2004
||an increase of 2.2%
For example, an OPTrust pensioner who received an annual pension of $19,000 in 2005 would see their pension increase to $19,418 in 2006.