The cost-of-living adjustment (COLA) for Canadian Public Service Pension Plan (PSPP) retirees and their survivors in 2025 is set at 2.7%, providing essential inflation protection. Meanwhile, retired members of other plans, such as the TVO Plan and Ontario Northland Plan, will receive different COLA adjustments based on their respective plan rules.
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What is COLA and How Does It Work?
COLA ensures that pensions retain their purchasing power by adjusting payments in response to inflation. The 2.7% adjustment for PSPP members reflects the rising cost of living as determined by the Consumer Price Index (CPI). Here’s what it means for retirees:
- Monthly Benefits: Your monthly pension will increase starting in January 2025, ensuring your income keeps pace with inflation.
- Personalized Statements: Retired Member Statements (RMS) detailing your individual COLA and updated gross monthly pension will be sent out in January.
COLA Variations by Pension Plan
- Public Service Pension Plan (PSPP)
PSPP members will receive the standard 2.7% COLA.- Designed to protect pensions from inflation.
- Applied automatically to monthly payments.
- TVO Plan Members
- COLA for 2025 is set at 1.64%, reflecting the TVO Plan’s specific calculation rules.
- Members will receive their updated RMS in December.
- Ontario Northland Plan Members
- Members under the Northline Transfer group will receive a set annual increase.
- Other Ontario Northland Plan members may receive ad hoc adjustments based on the PSPP funding policy, requiring plan surpluses to fund increases.
Understanding Your Pension Adjustments
How is COLA Calculated?
COLA is based on changes in the CPI over a specified period. For PSPP members, this ensures a fair adjustment that aligns with real-world inflation trends.
Why is COLA Different from Media-Reported Inflation?
Reported inflation may include a broader range of price fluctuations, whereas COLA calculations focus on stabilizing pensioners’ purchasing power over time.
How Much will CPP Pay in 2025? Higher Payouts and Contributions
CRA Federal Benefit Payment Schedule 2025: Official Key Dates Announced
How Much Will CPP and OAS Increase in 2025?
What Types of Pension Income are Eligible for Splitting with Your Spouse in Retirement?
Important Updates and Deadlines
- T4A and NR4 Tax Forms
Tax slips for 2024 will be available by mid-February 2025 through your e-services account or via mail. - Medical and Dental Submissions
Ensure reimbursement claims for 2023 are submitted by the end of 2024. - Early Retirement Bridge Benefits
PSPP members turning 65 in 2025 will see their early retirement bridge benefit end in the month they reach this milestone. - Direct Deposit and Payment Dates
If you’re not already using direct deposit, you can sign up through e-services for quicker and safer pension payments. The pay dates for 2025 are available on the Pension Pay Dates page.
Can You Still Receive CPP While Living Outside Canada? Everything You Need to Know
CPP Payments to Rise by 2.7% in 2025: What Retirees Need to Know
Canada Retirement Age 2024: Is it 65 or 67?
Should You Take CPP at Age 60? 5 Factors To Consider, Drawbacks
Contact Information for Assistance
Have questions or need to update personal information? Contact the PSPP Client Care Centre:
- Email: [email protected]
By understanding COLA and how it impacts your pension, you can plan for 2025 with confidence. For further details, visit the Inflation Protection/COLA page.
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