OPTrust pensions to increase by 2.2% in 2006Posted: November 11, 2005
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 Canada's 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
OPTrust's 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
|=||2.2||=||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.