Indexing rate – Retired members – Pension
The indexing rate for 2021 is 1.0%.
The indexing of public service pension plan benefits is governed by two pieces of legislation; the Public Service Superannuation Act (PSSA) and the Supplementary Retirement Benefits Act (SRBA).
Pension increases for retired members and their survivors are calculated each year using Consumer Price Index (CPI) data published by Statistics Canada. In accordance with the SRBA, the increase is based on a comparison of the twelve-month average of the monthly CPI for the year just ended, to the twelve-month average of the monthly CPI for the previous year. The SRBA specifies that the twelve-month period from October 1 to September 30 is to be used to calculate the increase payable the following January. The index used for the calculation is the CPI for Canada for all items (not seasonally adjusted).
As an illustration, outlined below are the data used to calculate the 2021 pension increase.
|Month/Year||CPISee table 1 note * %||Month/Year||CPISee table 1 note * %|
Table 1 Notes
|October 2018||134.1||October 2019||136.6|
|November 2018||133.5||November 2019||136.4|
|December 2018||133.4||December 2019||136.4|
|January 2019||133.6||January 2020||136.8|
|February 2019||134.5||February 2020||137.4|
|March 2019||135.4||March 2020||136.6|
|April 2019||136.0||April 2020||135.7|
|May 2019||136.6||May 2020||136.1|
|June 2019||136.3||June 2020||137.2|
|July 2019||137.0||July 2020||137.2|
|August 2019||136.8||August 2020||137.0|
|September 2019||136.2||September 2020||136.9|
|Monthly Average||135.3||Monthly Average||136.7|
The pension increase (indexing rate) for 2021 is the percentage increase in the monthly average CPI. This is calculated by subtracting the monthly average for the first period (October 2018 to September 2019) from the average for the second period (October 2019 to September 2020), then dividing this amount by the monthly average for the first period and finally multiplying it by 100, as follows:
136.7 − 135.3 = 1.4
(1.4 ÷ 135.3) × 100 = 1.0% (indexing rate for 2021)
It is important to note that the calculation of the increase payable each January does not include the monthly increases for the last three months of the previous year (October to December). These rates will be incorporated in the following year’s calculation.
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