Retiring with a pension from the OPSEU Pension Plan
Retiring with a pension from the OPSEU Pension Plan
What happens to your pension when you reach age 65?
How is your pension protected when you retire?
What happens if you work after your pension starts?
What could happen to your pension benefit if your spousal relationship ends?
What about health, dental and life insurance benefits after retirement?
How is your pension protected when you retire?
INFLATION PROTECTION
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 [CPI] ). It is calculated by dividing the Consumer Price Index average for the two 12-month periods ending the preceding September. For example, the 2012 inflation adjustment was calculated as
| October 2010 to September 2011 | minus | October 2009 to September 2010 | = | 119.1-115.8 | = 2.8% |
| October 2009 to September 2010 | 115.8 | ||||
The maximum increase in any one year is 8%. Any increase above 8% is rolled forward into the next year, to be used when the adjustment is less than 8%.
Example of pension with pro-rated inflation increase:
| Terminated from Plan | March 2011 |
| Pension began | April 2011 |
| Number of months on pension | 9 (April–December) |
| CPI increase for 2012 | 2.8% |
How to calculate your 2012 increase:
number of months on pension, divided by 12 x increase in CPI for 2012
= your 2012 adjustment
(9÷ 12 x 2.8% = 2.1%)
In January 2012, your pension would be increased by 2.1% to reflect the cost of living for nine months. In following years the full CPI increase is applied.
This chart shows how the inflation protection feature of the OPSEU Pension Plan works. The graph plots the growth of an average pension over an 8-year period from 2005.