Pension Inflation Calculation
Pension Inflation Formulae
University of Guelph Legacy Plan
For retirees receiving benefits from the original U of G Pension Plan, inflation adjustments are calculated each year for pensions earned prior to July 1, 2021. Adjustment is made for inflation above 2.0%, calculated on the average monthly CPI increase for the 12-month period May 1st to April 30th, and is paid beginning in September. The level of inflation (the CPI Increase) for the purpose of the September 30, 2022 post-retirement adjustments is 4.78%. This amount was determined based on the percentage by which the average monthly increase in the CPI for Canada, as published by Statistics Canada, during the May 2021 - April 2022 period exceeded the average level of the index during the preceding 12 months, May 2020 - April 2021. [The increase in average CPI between May 2020/Apr 2021 and that for May 2021/Apr 2022 was 1.44425-1.37833 = .06592. .This represents a 4.78% increase over 1.37833.] Using the plan’s CPI – 2% provision, the contractual pension increase at September 30, 2022 is equal to 2.78%. These calculations were based on the CPI metrics set out in the following link: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000411
Amalgamated University Pension Plan
For those people who retired after the UPP amalgamation on July 1, 2021, pension earned after that date is subject to the new UPP inflation formula and paid on the following January each year. The UPP inflation formula is different than the U of G plan. For the small portion of pension earned after July 1, 2021, the pension increase is 75% of the total inflation for the calculated period (i.e. if the inflation was 4.0%, the pension increase would be 3.0%). However, the inflation indexation may be less than the formula amounts depending on the Plan’s overall financial health and Funding Policy. Indexation of UPP pension benefits is not guaranteed. For more detailed information go to MyUPP.ca
In summary, retirees may receive an increase in September for the U of G pension earned before the amalgamation and in January for UPP service after amalgamation, if any. All pension is administered together and paid by the UPP organization. See https://myupp.ca/wp-content/uploads/2022/02/UPP-Member-Booklet-Dec-2021.pdf for more information
For details on your individual pension, please contact Human Resources at the University.