Cost-of-Living Adjustments (COLA)

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After you're retired, COLA will be applied to your pension.

About COLA

Cost-of-living adjustments (COLA) are effective each January and are applied to your ATRF pension (including the Advance & Reduction Option) before income tax is deducted.

For the pension payable on pensionable service to December 31, 1992, the COLA is calculated at 60% of the change from year to year in the Alberta Consumer Price Index (ACPI).

For the pension payable on pensionable service from January 1, 1993, the COLA is calculated at 70% of the change from year to year in the ACPI.

Plan members who received a pension for less than 12 months in the previous year receive a pro-rated adjustment.

The Teachers’ Pension Plans Act defines the method used to determine the COLA as the most recent 12-month period ending October 31 compared to the previous 12-month period ending October 31. This method is the same as used by other major pension plans. The Canada Pension Plan and Ontario Teachers’ Pension Plan both use the Canadian Consumer Price Index (CPI), not the ACPI which is specific to Alberta’s economy.

Pension Information Statements 

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

Plan Sponsors' Decision on the Factors

The two ATRF plan sponsors agreed, as part of a joint Memorandum of Understanding in 1992, 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.

Effective January 1, 2021, pensions will increase by 0.78% for pensionable service prior to 1993 and by 0.91% for pensionable service after 1992.

How COLA is Calculated

COLA is determined by taking the sum of the 12 most recent ACPI values (leading months, ending October 2020) and dividing by the sum of the previous 12 months (trailing months, ending October 2019).

The rate of 1.30% effective January 1, 2021, is calculated as follows:

Total ACPI (November 2019 to October 2020)
______________________________________
Total ACPI (November 2018 to October 2019)

[(1,733.00 / 1,710.70 ) – 1] = 0.0130.
Rounded to three decimal places = 0.013 or 1.30%

At the bottom of the page are the monthly ACPI values to show you how we arrived at the above calculation.

Alberta Consumer Price 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.

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

Price Indices

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

 

COLA Trends

COLA TrendsACPI60% COLA70% COLA
January 20211.3%0.78%0.91%
January 20201.7%1.02%1.19%
January 20192.5%1.5%1.75%
January 20181.3%0.78%0.91%
January 20171.3%0.78%0.91%
Lowest since 1994: 20100.1%0.06%0.07%
Highest since 1994: 20045.7%3.42%3.99%

COLA Calculation

ACPI Values Nov 2018-Oct 20202018/19 ACPI2019/20 ACPI
November140.7143.6
December140.5143.7
January140.5144.7
February142145.5
March143.1144.1
April143.7143
May144144.1
June142.7145
July143.4144.2
August141.6143.4
September142.9145
October143.6145.2
Total1710.71733