Your monthly pension payment may increase to reflect increases in the cost of living.
Your monthly pension payment may increase as a result of an annual cost-of-living adjustment (COLA). This adjustment may be added to your pension to help it keep pace with increases in the cost of living over time.
Once a COLA is granted, it becomes part of your lifetime pension. The COLA is also applied to the bridge benefit and the temporary annuity portion of your pension, if applicable.
There is no guarantee that a COLA will be granted every year.
How the board decides if COLA will be applied
In deciding whether to apply a COLA cap each year, the College Pension Board of Trustees reviews:
- Changes in the Canadian consumer price index (CPI) over a 12-month period from November to October
- The COLA cap
- The funds available in the inflation adjustment account of BC's College Pension Plan (both active members and employers contribute to this account)
If the board grants a COLA, it will take effect in January.
The COLA cap
The COLA cap is the maximum amount that can be applied in any given year. The COLA cap is set by the College Pension Board of Trustees following each actuarial analysis of the inflation adjustment account. Having a cap ensures that COLAs, which are not guaranteed, remain sustainable for the long term.
For 2021 and 2022, the COLA cap has been suspended. That means if a COLA is granted, the amount may be equal to the average increase in the CPI. However, the board must still consider the funds available in the inflation adjustment account when setting the COLA amount.
At any time, the board may choose to reintroduce the cap on the maximum COLA to protect its sustainability.
Learn how COLA affects your pension
See the most recent winter issue of Pension Life to find out if a COLA will be applied and, if so, the percentage. You can check your January pension statement to find out how the COLA may increase your monthly pension payment for the coming year.
Cost-of-living adjustment history
The following table shows the COLAs granted since 2000