After you begin receiving your pension, a Cost of Living Adjustment (COLA) may be applied to your pension payments subject to the Plan’s ability to finance it. We use inflation protection as a lever to keep the Plan sustainable. The Plan undergoes an Actuarial Valuation (a financial checkup) performed by the Plan’s Actuary every three years. Part of this valuation includes a Benefits/Funding test to determine the level of indexing the Plan can afford to pay. The December 31, 2019 Actuarial Valuation determined that the Plan can afford to keep indexing at a level of 50% of inflation for the next three years (2021-2023).
The COLA represents the percentage change in the Consumer Price Index (CPI) for Canada from the 12 months ending in October to the previous 12-month period.
Historical UBC Staff Pension Plan COLA Adjustments
Over the past 10 years, the adjustments applied to your Staff Pension Plan payments have been as follows (Effective as of January 1):
|10 Yr. Average||0.83%|
*This amount is 50% of the change in CPI over the last year.
It’s important to note that if the cost of living decreased over a 12-month period, the calculation of COLA would produce a negative amount. However, in that case, pension payments are not decreased on January 1 of the next year. No adjustment is made to the pension amount – it remains the same as the prior year amount.