Answers to your frequently asked questions.
Workplace pensions play an important role in ensuring a secure retirement for Canadians. Yet many do not have access to one. At TTC Pension Plan (TTCPP), we are proud to offer members a plan that provides a secure retirement income guaranteed for life. This also means providing retired members with a cost-of-living adjustment (COLA) when possible.
The decision to provide a COLA is based on a careful review of the Plan’s performance and actuarial reports, and it requires approval of the TTC Pension Plan Board (the Board), TTC and active members. While we are pleased to have provided a COLA every year since 2011, it is important to note that there is no contractual obligation to provide an increase and future Plan improvements are not guaranteed.
Please see below for answers to questions you may have about the COLA.
FREQUENTLY ASKED QUESTIONS
What is the COLA in 2023?
For the 2023 COLA, the Board evaluated the Plan’s affordability and determined that a 5.35% COLA would be provided in 2023. The Board’s decision was made with the long-term sustainability of the Plan in mind and reflects a careful consideration of various factors, such as investment performance and economic conditions.
The 5.35% increase will be applied to your gross pension and will be retroactive to January 1, 2023. If you retired in 2022, your percentage increase will be prorated based on the number of days in 2022 you were retired. You will get a pay statement in the mail detailing your August 2023 pension amount, which will include the retroactive payment, and another in September 2023 which will be your new gross pension with the COLA included.
How is the COLA determined each year?
Each year, the Board decides whether to provide a COLA after a careful review of the Plan’s performance and actuarial reports. ACOLA requires approval by the Board, TTC, and active members.
A maximum COLA is based on the average monthly Consumer Price Index (CPI) published by Statistics Canada for the previous two years. The method used to calculate COLA is consistent with the method used by the Canada Pension Plan.
Each year the Board reviews the affordability of Plan enhancements and the long-term health of the Plan, and it is important to note that there is no guarantee of receiving a full or partial COLA increase in any given year.
When will members know if the benefit improvements, including COLA, are approved?
The proposed benefit improvements will be presented to the TTC Board for approval on June 12, 2023 and to the active membership for approval at the Annual General Meeting (AGM) on June 24, 2023. All active members and retired members are welcome to attend. Sign up at www.ttcpp.ca/agm. If you can’t attend, check the news section of ttcpp.ca in the days after the AGM.
What happens if the COLA is not approved by the membership at the Annual General Meeting?
Plan Administrators are not permitted to pay COLA to retired members if the active members do not vote to approve the Bylaw amendments required to enact the proposed COLA at this year’s AGM. Plan Bylaws do allow for a subsequent Special General Meeting to be held during which a new proposed Bylaw Amendment could be presented for approval, in the event this occurs.
If we are fully funded, why can’t the Board recommend a full COLA for 2023?
While a fully funded Plan means that TTCPP has enough assets to cover its liabilities, there are other factors that the Plan must consider when determining the COLA rate. These factors may include the Plan’s investment performance, the current economic conditions and the potential for future market volatility.
The COLA decision made by the Board ensures that the Plan’s long-term sustainability is maintained and that we will continue to meet our pension obligations to members well into the future.
Is the Plan in jeopardy of folding/winding down?
There is currently no risk of the Plan winding down, as the Plan’s funding level, investment performance and actuarial analysis demonstrate that it is in excellent financial condition and able to meet its obligations to active and retired plan members.
When will I get an increase in my pension payments?
Any approved COLA and retroactive payment to retired members will be included in your August 15, 2023 pension payment.
How much will my increase be?
The 5.35% increase will be applied to your gross pension and will be retroactive to January 1, 2023. If you retired in 2022, your percentage increase will be prorated based on the number of days in 2022 you were retired. You will get a pay statement in the mail detailing your August 2023 pension amount, which will include the retroactive payment, and another in September 2023 which will be your new gross pension with the COLA included.
Have questions? We’re here to help. Email us at membercare@ttcpp.ca or call us toll-free in Canada and the U.S. at 1-800-663-6820, Monday to Friday, 8 a.m. to 4 p.m., Eastern Time.