Cost-of-living adjustments

Your monthly pension payment may increase to reflect increases in the cost of living.

Your monthly pension payment may increase because of an annual cost-of-living adjustment (COLA). Providing COLAs that are sustainable over the long term and within the plan's long-term funding capacity is the second priority of BC's Municipal Pension Board of Trustees (after providing lifetime pension benefits).

This adjustment may be added to your pension to help it keep pace with increases in the cost of living. The COLAs are based on:

  • The change in the Canadian consumer price index (CPI) from September to September
  • A COLA cap that may be set by the board
  • The funds available in the plan's inflation adjustment account

COLAs are funded from the plan’s inflation adjustment account. This account holds a portion of member and employer pension contributions, and it earns investment income. It may also grow through future surpluses according to guidelines in the plan’s Joint Trust Agreement.

If the board decides to provide a COLA, it will take effect in January. Increases are applied to the lifetime portion of your pension. The COLA is also applied to the bridge benefit and the temporary annuity portion of your pension while you are receiving them.

The board follows specific rules when deciding to provide a COLA for the year within three limits:

  • The adjustment cannot be greater than the September-to-September increase in the CPI
  • The adjustment cannot be higher than the COLA cap, when it applies
  • The cost of the adjustment cannot exceed the funding set aside to pay for the COLA

For example, if the change in CPI from September to September is 6.0 per cent, the board can provide a COLA of a maximum of 6.0 per cent. If the change in CPI is higher than any COLA cap in place at the time, the board can only provide a COLA up to the amount of the cap.

Although future COLAs are not guaranteed, once you have received an adjustment, it becomes part of your basic lifetime pension.

In your first year of retirement, your COLA is pro-rated according to the number of months you’ve received your pension.

For example, if you started your pension in July, you will have received six pension payments in that calendar year. That means you’ll get half (6/12ths) of the COLA amount provided the following January. You’ll receive the full COLA amount once you’ve received 12 pension payments in a calendar year.

View the most-recent winter issue of Pension Life to find out if a COLA will be provided and, if so, its percentage. You can check the pension statement you receive in January to see the impact of the COLA on your monthly pension payment for the coming year.

Questions about cost-of-living adjustments are common for members getting ready to retire. The Cost-of-living infosheet, found under related documents, helps explain how COLA works.

Cost-of-living adjustment history

Year Increase (%)
2024 3.8
2023 6.9
2022 2.1
2021 0.5
2020 1.9
2019 2.1
2018 1.6
2017 1.3
2016 1.0
2015 2.0
2014 1.1
2013 1.2
2012 3.2
2011 1.0
2010 0.0
2009 3.4
2008 2.5
2007 0.7
2006 3.4
2005 1.8
2004 2.2

External link to Statistics Canada publication

See Statistics Canada's publication Your Guide to the Consumer Price Index for information on how the consumer price index is calculated.

Related document for cost-of-living adjustments

Cost-of-living infosheet