An increase may be on the way
TTC Pension Plan provides members with a secure retirement income 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 Board, TTC and member approval. It is important to note that there is no contractual obligation to provide an increase and future Plan improvements are not guaranteed.
We are pleased to have provided a COLA every year since 2011. This year, we have some more good news: if you were retired as of Dec. 31, 2021, there is a proposal to increase your pension by up to 2.41%
- On April 28, 2022, the TTCPP Board of Directors approved this increase in accordance with Plan Bylaws.
- On June 23, 2022, this proposal will be presented to the TTC Board for approval.
- On June 25, 2022, active members will vote to approve the updates at the Annual General Meeting.
If the increase is approved:
- Beginning Sept. 15, 2022, you’ll receive up to a 2.41% increase to your pension.
- The 2.41% increase would be effective as of Jan. 1, 2022, so on Sept. 15, 2022, you’ll receive a lump-sum retroactive payment for the amount owing since Jan. 1.
Please see below for answers to questions you may have about the proposed increase.
Frequently asked questions
How is the increase calculated?
Each year, the Board assesses affordability to provide a COLA based on the long-term health of the Plan. The COLA is based on the average monthly consumer price index (CPI) published by Statistics Canada for the previous two years. The method used is consistent with the method used by the Canada Pension Plan.
The 12-month average CPI ending in Sept. 2020 was 136.7. This is compared to the average for the same 12-month period ending in Sept. 2021, which was 140.0.
COLA is calculated as follows:
[140.0 – 136.7] ÷ 136.7 = 2.41%
Why doesn’t the increase match the actual rate of inflation?
Each year, the Board assesses the affordability of Plan enhancements and the long-term health of the Plan. Based on the comparative review of the 12-month average consumer price index (CPI) in 2020 and 2021, the COLA calculation is 2.41%. Headline inflation, looks at CPI in a month compared to the same month in the prior year has been increasing at a faster rate since Q2 of 2021.
This is the same methodology that TTCPP has used for several years, and is consistent with the Canada Pension Plan.
Why can’t the COLA increase be higher?
Under the Income Tax Act, any COLA increase granted cannot be more than the cumulative percentage increase in the CPI since a member’s retirement date. For members who retired after Dec. 31, 2010, you will have received the maximum allowable COLA increases.
Why does it look like my pension payment has decreased the month after receiving the COLA adjustment?
It hasn’t—it just looks that way since your pension payment in the preceding month included the lump-sum COLA adjustment retroactive to Jan. 1, 2022.
Your monthly pension payments in the months after you receive the COLA adjustment will in fact be up to 2.41% higher than they would be without the COLA.
I started collecting my TTCPP pension in 2021; what am I entitled to?
Your COLA increase will be prorated based on the number of days you were receiving your pension in 2021. It’s calculated as follows:
- Take X, which is the number of days you received a pension in 2021
- Divide X by 365 (number of days in the year) and
- Multiply the result by the COLA of 2.41%
X ÷ 365 × 2.41% = [% increase]
How will I know if the COLA is approved?
Attend the Annual General Meeting (AGM) on June 25, 2022. 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 do I get if I retired in 2022?
This increase does not apply if you retired after Dec. 31, 2021. However, look out for more information about a potential base year update that could increase your pension.
Have questions? We’re here to help. Email us at firstname.lastname@example.org 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.