Starting January 2025, your pension will increase by 2.7 per cent. The annual cost of living adjustment (COLA) is applied to all pensions in pay, including survivor pensions, and to the deferred pensions of former and divested members.
Every January, pensions are adjusted for the increase in the cost of living, as measured by the Consumer Price Index (CPI), reported by Statistics Canada. This helps to protect your pension against the impact of inflation and to ensure it does not lose value over time.
How your annual adjustment is calculated
OPTrust’s annual COLA is calculated based on the change in the average monthly CPI between October and September for the previous two years. For example, the 2025 increase was calculated as follows:
The maximum increase in any single year is 8 per cent. Any increase above this level is carried forward and applied in the next year when the adjustment is less than 8 per cent.
Consumer price index
The Consumer Price Index (CPI) is a measure produced by Statistics Canada that reflects the cost of a weighted basket of goods and services that are typically purchased by Canadian consumers every month. The CPI is widely used as an indicator of the change in the general level of consumer prices and the rate of inflation.
For more information on the Consumer Price Index, visit the Statistics Canada website.
Lifetime protection
The COLA feature is designed to protect the purchasing power of your pension during your lifetime. For example, a retiree who started receiving their pension in January 1995, with an annual pension of $20,000, would receive $37,313 from OPTrust in 2025 - an 87 per cent increase over a 30-year period.
Since 1995, COLA has averaged 2.1 per cent per year.
To find out how much your pension will increase in 2025, view your Pensioner Information Change Statement, available through your secure Online Services account in early January.
Increase pro-rated for new retirees
If you retired in 2024, your COLA is pro-rated for the length of time you received a pension. For example, if you retired in June 2024, your pro-rated COLA is calculated using the number of months you received a pension, divided by 12, multiplied by the 2025 increase.
6 ÷ 12 x 2.7% = 1.35%
In January 2025, your pension would increase by 1.35 per cent to reflect the cost of living for six months. In following years, any COLA granted will not be pro-rated.