What happens to your pension after you retire?
What Happens to your Pension After You Retire?
How and when your pension is paid
Inflation protection – annual increase
Changes to your pension at age 65
Working After your Pension Begins
If a pensioner lacks the capacity to deal with his or her finanical affairs
What Deductions are Taken from Your Pension?
What Death Benefits are Available for your Survivors after Retirement?
What About Health, Dental and Life Insurance Benefits?
Inflation protection – annual increase
Every January your pension, or that of your survivor, is adjusted for the increase in the cost of living. The adjustment is applied the year after you start to receive a pension. The first adjustment is pro-rated for the length of time you received a pension in the previous year. The inflation adjustment reflects the increase in the cost of living in Canada (as measured by the Consumer Price Index). It is calculated by dividing the Consumer Price Index average for the two 12-month periods ending the preceding September. For example, the 2008 inflation adjustment was calculated as:
| October 2006 to September 2007 = 110.8 | = 1.8% |
| October 2005 to September 2006 = 108.8 |
The maximum increase in any one year is 8%. Any increase above 8% is carried forward into the next year, when the adjustment is less than 8%.
EXAMPLE OF PENSION WITH PRO-RATED INFLATION INCREASE:
Terminated from Plan
March 2007
Pension began
April 2007
Number of months on pension
9 (April–December)
OPTrust inflation adjustment for 2008
1.8%
How to calculate your pro-rated 2008 increase:
number of months on pension, divided by 12 x increase in CPI for 2008
= your 2008 adjustment
(9 ÷ 12 x 1.8% = 1.35%)
In January 2008, your pension would be increased by 1.35% to reflect the cost of living for nine months. In following years the full CPI increase (up to 8%) in any given year is applied.
Inflation Protection Chart
This chart shows how the inflation protection feature of the OPSEU Pension Plan works. The graph plots the growth of an average pension over a 15-year period from 1994.
