You may have seen reports in the media that during this period of economic recovery, Canada is seeing a rise in inflation rates.

In retirement, we collect our guaranteed monthly pension payments, and in the Teachers’ Pension Plan (TPP) we have also received an annual cost-of living adjustment (COLA), which helps keep pace with increases in inflation. Our pension plan has a special Inflation Adjustment Account which is designed to fund those inflation amounts.

Once established, our lifetime pension amounts are guaranteed, but the COLA increases are not guaranteed. To quote the TPP website:

Each year, the Teachers’ Pension Board of Trustees carefully considers various factors to decide whether to approve a COLA – and if so, its value. If the board grants an adjustment, it will take effect in January and is applied to your monthly pension payment (and any bridge benefit and/or temporary annuity you may be receiving).

The decision is based on two factors:
• The annual change in the 12-month average Canadian consumer price index (CPI)
• The funds available in the plan’s IAA

So, with inflation in the news lately, what does that mean for retired teachers?

The latest Consumer Price Index number (September 30, 2020, to September 30, 2021) shows a cost-of-living increase of 4.4%. The Teachers’ Pension Plan Board of Trustees will evaluate if they believe the Inflation Adjustment Account is well enough funded to support the full increase.

In recent years the full CPI increase has been covered. Over the past ten years, due to compounding of the increases listed below, our guaranteed pensions have increased by more than 17%.

  • 2021 0.5%
  • 2020 1.9%
  • 2019 2.2%
  • 2018 1.6%
  • 2017 1.3%
  • 2016 1.0%
  • 2015 2.0%
  • 2014 1.1%
  • 2013 1.2%
  • 2012 3.2%

The BCRTA Pensions and Benefits Committee monitors the annual COLA decision carefully. So stay tuned for the announcement of the Teacher Pension Board of Trustees’ decision!

Arnie Lambert
Chair, Pensions and Benefits Committee