Pension Board Agrees to Remove Cost-of-Living Adjustment Cap

Following an extensive actuarial analysis of the Municipal Pension Plan (MPP)'s basic account and inflation adjustment account, the pension board has decided to remove the limit to the cost-of-living adjustment (COLA) impacting those currently collecting their pension and those planning to retire in the next three years.

COLAs are considered a non-guaranteed benefit of the plan, meaning that monthly pension payments do not automatically adjust to offset rising inflation rates. Given the financial strength of the plan's basic and inflation adjustment accounts, the COLA cap has been removed for the next three years, providing valuable inflation protection.

From 2023 through 2025, COLA may be in line with the annual changes in the Canadian consumer price index (CPI). Trustees still have the option of providing a COLA less than the increase in the CPI from September to September, based on the health of the plan.

The MPP Board will discuss COLA at the November board meeting; the COLA amount will be shared on the MPP website in January at which time it will take effect. This will apply to the retiree's lifetime pension payment as well as bridge benefit payments and any temporary annuity that may be received.

Member and employer contribution rates will not increase as a result of this decision.

To learn more, review the MPP board communique.

Group health benefits for retired members

Effective January 1, 2022, retired members have access to optional group benefits through the Municipal Retiree Benefit Trust (MRBT). This program and its funding are not related to the plan's valuation results.