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Cost-of-Living Adjustments (COLA)

​​Cost-of-living adjustment (COLA) increases, if any, take effect on January 1 each year and are based on your gross pension, including the ATRF advances and reductions (where applicable). This is done in accordance with the Teachers’ Pension Plans Act. Click here to view the Cost-of-Living Adjustment (COLA) Calculation Explanation Information Sheet.

The COLA increase is calculated as follows:

60% X annual increase* in the Alberta Consumer Price Index (ACPI) X pens​ion related to service prior to 1993
plus
70% X annual increase* in the ACPI pension related to service after 1992​​

* Increase in the 12-month period ending on October 31 over the previous 12-month period.

Pensions paid for less than a full year received a pro-rated portion of the COLA.

The Teachers’ Pension Plans Act defines the method used to determine the COLA adjustment applicable to your pension. This method uses the most recent 12-month period ending October 31 compared to the previous 12-month period ending October 31 to determine the ACPI.** This method is the same as used by other major pension plans. The Canada Pension Plan and Ontario Teachers Pension Plan use the Canadian Price Index (CPI).**

** The CPI measures the inflation for the Canadian economy while the ACPI is specific to Alberta’s economy.

Twelve-month periods are used in the calculation so that results are not unduly skewed by sudden or temporary rises or drops in the cost of living. The year-over-year method, often used for news reports, provides a snapshot of the inflation picture compared to the same time last year and is not as representative as the 12-month average method.

COLA Tren​​​ds

COLA Trends​ACPI60% COLA70% COLA
​January 2017​1.30%​0.78%​0.91%
​January 2016​1.20%​0.72%​0.84%
​January 2015​2.60%​1.56%​1.82%
Lowest since 1994: 20100.10%0.06%0.07%
Highest since 1994: 20045.70%3.42%3.99%

Alberta Consumer P​rice Index

The Alberta Consumer Price Index (ACPI) measures the average price change of goods and services purchased by Alberta consumers, by comparing the cost of a fixed basket of goods and services from different time periods. There are eight major components, (listed below) each with a specific weighting of the fixed basket. For more information about the ACPI refer to the Statistics Canada website.

  1. Shelter
  2. Transportation
  3. Food
  4. Recreation, Education & Reading
  5. Household Operations, Furnishings & Equipment
  6. Clothing & Footware
  7. Health & Personal Care
  8. Alcoholic Beverages & Tobacco

Changes in P​ri​​ce Indices

Price indices are based on such things as the increase or decrease of natural gas, electricity, and homeowners replacement costs, which fluctuate from year to year.

Plan Sponsors’ Decision on the​​ Factors

The two ATRF plan sponsors agreed, as part of a joint Memorandum of Understanding in 199​2, to use the factors of 60% of ACPI (for service prior to 1993) and 70% of ACPI (for service after 1992). The cost of each factor is funded through contribution rates. The cost of the 60% factor is shared equally by teachers and the Alberta Government; the cost of the extra 10% is the responsibility of teachers. The incremental cost of a 100% COLA was not considered to be affordable by either sponsor at that time.

Pension Information Statements Describe COLA C​alculation

Pension Information Statements will be mailed late January along with a copy of the Pension Update Newsletter. (To receive an electronic copy of the statement, instead of a mailed statement, select this option after registering for MyPension.) The statement shows your updated pension payment amount, including the impact of any income withholding tax changes.

Future CO​​​LA Updates

Benefit changes are the responsibility of plan sponsors. Any changes would be part of negotiations between the Alberta Teachers’ Association (ATA) and the Alberta Government.

Contact Us for M​​​ore In​​formation

Please contact ATRF for clarification of the above material please email retiredmember@a​trf.com.

© Copyright 2015, Alberta Teachers' Retirement Fund Board
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