On an annual basis, your monthly TPP pension payment may increase as a result of a cost-of-living adjustment (COLA) each July 1st.
COLA increases for retired members and their survivors are calculated each year using Consumer Price Index (CPI) data published by Statistics Canada. To determine CPI, Statistics Canada measures monthly changes in the cost of living by examining the price of a basket of consumer goods and services typically purchased by Canadian households and compares the ups and downs to previous months. To calculate COLA, TPP uses the average CPI for the 12 months ending April 30 of the preceding year over the average CPI for the 12 months prior to that period.
The TPP has 2 types of COLA:
Your retirement date determines which type of COLA you could receive. These details are below.
Variable COLA (If you retired on or after August 1, 2006 or retired before August 1, 2006 and elected this COLA type)
Variable COLA is based on the TPP’s funded status at year end December 31 of the previous year and can only be granted when the Plan is fully funded (100% or more) or is at least 90% funded.
2023 Variable COLA:
At December 31, 2022, the Plan was 75.1% funded on a going-concern basis. This represents a decrease over 2021’s funded ratio of 82.5%, which was the highest funded status the Plan had seen since the October 2008 financial crisis. The Plan’s deficit was $1.819 billion, being the difference between the net assets available for payment of benefits of $5.480 billion and the actuarially calculated liabilities of $7.299 billion.
Due to the Plan being less than 90% at December 31, 2022, retirees and beneficiaries eligible for a Variable COLA will not receive an increase in their pension in 2023.
CPI minus 1% COLA (If you retired before August 1, 2006)
If you retired before August 1, 2006, COLA can be granted when the increase in the CPI is greater than 1%.
2023 CPI-1% COLA:
Effective July 1, 2023, a 5.4% COLA will be added to your monthly pension benefit. An increase in your pension benefit is granted when the increase in Canada’s Average Consumer Price Index (CPI) is greater than 1%.
Your TPP Cost-of-Living Adjustment amount was calculated as follows:
|Increase in the average CPI||6.4%|
|Minus 1.0% as prescribed by the formula||-1.0%|
|Cost of Living Adjustment||5.4%|
The increase in the average CPI for the 12 months ending April 30, 2023 calculation:
The average CPI for 12 months ending April 2023 = 153.7
The average CPI for 12 months ending April 2022 = 144.4
153.7 - 144.4 = 9.3
9.3 / 144.4 = 6.4% (the increase in the average CPI)
CPI minus 1% COLA history:
2023 = 5.4%
2022 = 3.8%
2021 = 0.0%
2020 = 0.9%
2019 = 1.1%
For more information on the CPI, please visit the Statistics Canada website at www.statcan.gc.ca.