Benefits for Retired Members
June 2011 - Section 6

Indexation (Cost of living pension increases)

Under Part III of the Public Service Superannuation Act, all public service pension recipients get automatic annual pension increases every January 1 to help offset increases in the cost of living. These pension increases are added to the monthly amount paid in the previous year, which, after your first year of retirement, will include your pension and all previous increases, not just your pension at retirement. Any increase you are entitled to would be included in your monthly pension cheque for the January following your date of retirement. Any further increases would be payable on January 1 of following years.

The first indexing adjustment after retirement is pro-rated to take into account only the number of full calendar months for the balance of the year, as illustrated in the following example:

Retirement date: November 16

Number of full months after retirement date and before January 1 of the year following the year of retirement: one month

Indexation payable: 1/12 of the full increase authorized for January 1.

Further pension increases will become payable each January 1 thereafter and will be equal to the full increase authorized for each year.

In the case of a deferred pension which commences after the year of retirement, indexation will be added as soon as your pension becomes payable. The amount will be based on the increase in the cost of living from the date you ceased to be employed to January 1 of the year in which your pension commences. The next January and each year thereafter, you will receive the full increase authorized for that year.

As indexation is directly related to the amount of pension payable, any changes to your pension results in a corresponding adjustment in your pension increase. As indicated in Section 4, the indexing amount payable will be lower when the bridge benefit stops. For example:

Indexing on lifetime pension + bridge benefit

Indexing on lifetime pension only

Re-employment could alter your entitlement to indexation. Section 8 has further details on this point.