Cost of Living Adjustments
2024 COLA
Effective July 1, 2024, TRAF will grant a cost of living adjustment (COLA) of 2.20% to eligible members receiving a TRAF pension. The Consumer Price Index for Canada increased by 3.40% during 2023 (December over December).
You can compare COLA granted since 1977 by reviewing the historical COLA chart and accompanying information. This document also provides a comparison of COLA to CPI (and the approximate impact on the purchasing power of the TRAF pension) and information on expected future COLA.
What is COLA?
COLA payments are meant to help offset inflation and are granted to the extent they can be funded by a separate account known as the Pension Adjustment Account (PAA). The PAA is funded by a portion of active members’ contributions and investment earnings and is responsible for 50% of the COLA granted to eligible retired members or their beneficiaries. The Province funds the other 50% of the COLA as benefit payments are made.
How is it determined?
The maximum amount of COLA that can be paid each year is the lesser of:
- the change in the Consumer Price Index for Canada – December over the previous December, and
- the amount the PAA can support.
How much COLA will I receive each year?
Given the number of variables involved, it is difficult to predict the amount of future COLA. Members are cautioned that there is no certainty of a COLA in any given year and the long-run average COLA could be significantly below the corresponding increase in CPI.
Projection analyses conducted by our plan actuary indicate that an average annual COLA of approximately 0.85% could be granted over the next 40 years (subject to annual fluctuations and the CPI limit). While 0.85% is a very precise estimate, it is nevertheless an estimate – it could be higher or lower by a meaningful amount. Annuities are not entitled to a COLA.
When will I receive COLA?
COLA is granted in July. You may be entitled to receive your first COLA in your 13th pension payment. In order to receive a full COLA, you must have received pension payments for 18 months prior to that COLA being granted. Otherwise, the COLA will be pro-rated based on the number of months you received a pension.
Will my beneficiary continue to receive COLA after I pass away?
COLA will continue for any plan option that provides ongoing pension payments after the death of a member. However, the beneficiary is only entitled to two-thirds of the COLA payment – that includes the cumulative COLA from the date your pension started to the present date, as well as for future COLA granted.
Example: When Joe retired in July 2005, he selected Plan C – Full to Last Survivor which provided him with a pension of $2,500 per month. He also receives $259 in COLA for a current total monthly payment of $2,759.
This is how the pension is impacted if either Joe or his wife Linda pass away.
Joe’s initial pension | If Linda passes away first, Joe receives | If Joe passes away first, Linda receives | |
| Basic monthly pension amount | |||
| Plan C – Full to Last Survivor | $2,500 | $2,500 | $2,500 |
| Accumulated COLA amount | $ 259 | $ 259 | $ 173 |
| Gross amount | $2,759 | $2,759 | $2,673 |
