Proposed Change in Pension Indexing

Explanation of Proposed Changes

The CAAT Pension Board has proposed a significant change in the calculation of retiree pensions commencing in 2015 by removing the current yearly "ad hoc" indexation of retirees' pensions.

For the purposes of calculating indexation, Pensionable Service is broken down into separate periods, as follows;

Indexation applied to the part of the pension that corresponds to service earned prior to December 31, 1991 is guaranteed until 2014. This provision has been in place since 2001.

Indexation applied to the part of the pension that corresponds to service earned between January 1, 1992 and December 31, 2007 will be paid indefinitely.

Indexation applied to the part of the pension that corresponds to service earned from January 1, 2008 onward will receive indexation in the years that the Plan can afford it and remain fully funded. This was introduced in the Funding Policy, and came into effect as of January 1, 2008.

Disclaimer: The OCRA pension calculator has been developed to provide an approximate estimate of the effect of the proposed removal of the indexing factor from the 2015 Pension calculation. Because of the many variables and assumptions inherent in the calculations, OCRA can take no responsibility for the accuracy of individual retiree results and must stress that these must be considered as rough estimates only.

Please note: The proposed removal of the indexing factor from the 2015 Pension calculation applies to pre-1992 years of service. The calculations take into account the guaranteed 1992-2007 indexing, but not possible loss of indexing for post-2008 service.

Pension Scenarios

Several scenarios have been calculated to illustrate the effect of the proposed change in indexing. If you pick the one that most closely approximates your situation, it should give you some idea on how the change will impact your pension after 2015.

Note:   Consumer Price Index assumed to be 3%

1. Retirement Date before January 1, 1992

1. 2011 Pension             $20,000
2. 2011 Pension             $40,000
3. 2011 Pension             $60,000

2. Retirement Date after January 1, 1992

1. 2011 Pension             $20,000
2. 2011 Pension             $40,000
3. 2011 Pension             $60,000

Click here to access the specified calculation estimates in PDF format. Please note that you must have Adobe Acrobat Reader installed on your computer to open the file. If you do not have a copy, one can be obtained from the following location. Click here to download free copy of Adobe Acrobat Reader

Please note that if you wish to calculate the estimated impact on your own pension you will require the OCRA Pension Calculator. This calculator was developed to show the impact of loss of indexation on CAAT retiree pensions.

The pension calculator is intended to be a benefit for OCRA members only. Non-members can receive the calculator file by becoming an OCRA member. Simply click here and download the OCRA membership form from the Membership Web page. Complete the form and mail it with a $10 cheque for the annual membership fee to the membership co-ordinator whose name and mailing address are listed on the form. The calculator file will be forwarded by email to new members upon receipt of the form and membership fee.

OCRA members can obtain the Microsoft Excel file "OCRA Pension Calculator 2011" by clicking here to send an e-mail to OCRA . Please note that you must have the Microsoft Excel program installed on your computer to run the file.