Good news for January 1, 2022: As of January 1, 2022, the rate of indexation that applies to your pension benefit, based on the percentage increase in the CPI (Consumer Price Index) from October 1, 2020 to September 30, 2021, is 2.41%. This indexation rate reflects the full increase in the CPI, even above 2%, because of the very good performance of the pension fund for the period ending on May 15, 2021, the last date on which the actuarial valuation was filed with the financial authorities of the province.
The full indexation will apply to those retired for the whole period of twelve months preceding, while new pensioners who started their pension during 2021 will receive a percentage increase proportional to the number of months they received benefits.
In addition, still because of the very good performance of the pension fund, the missing indexation of 0.21% that had not been able to be allocated as at January 1, 2019 (see the table below) was also able to be considered by the Pension Committee which recommended to the Board of Governors to allocate this missing indexation. This recommendation was considered by the Board of Governors' April 25, 2022 meeting and it was approved, prospectively from January 1, 2022. This additional indexation will be added in the next few months and a communication from Human Resources Service will provide the details. Allocating this last missing indexation means that all indexations have been fully allocated since 2002. We will keep you updated on when the indexation will be processed.
Pension Indexation Formula
Every January, if you are a member of the University of Ottawa Pension Plan, your pension will be automatically adjusted to reflect some or all of the increase in the Consumer Price Index (CPI), beginning in the year after your retirement. The pension indexation formula is based on the increase in the CPI during the period of October 1st and September 30th of the previous year, up to a maximum increase of 8%.
- If the increase in the CPI is less than 2%, the adjustment will be equal to the percentage increase in the CPI.
- If it is between 2% and 3%, you will receive a 2% increase.
- If the increase in the CPI is greater than 3%, your pension increase will be 1% less than the CPI.
Any portion of the increase in the CPI not granted will be automatically given if the performance of the Pension Fund exceeds specified criteria. It may also be awarded on an ad hoc basis by the Board of Governors, depending on the status of the Pension Fund.
Any increase in the CPI above 8% will be applied to the pension in a later year when the adjustment is less than 8%. The increase in your pension on the first of January after you retire will be based on the number of complete months remaining in the calendar year after your retirement.
Pension Indexations in the past
This table shows all indexations since 2002, showing that all indexations have now been fully allocated, most recently, the missing indexation from 2019.
* Indexations not granted are evaluated each year based on the performance of the Pension Fund. If performance meets the established criteria, the indexations not previously granted are allocated, on the recommendation of the Pension Plan Committee and a decision by the Board of Governors