Cost of Living Adjustment (COLA)

2018 COLA

Effective July 1, 2018, TRAF paid a cost of living adjustment (COLA) of 1.35% to members receiving a TRAF pension. The Consumer Price Index for Canada increased by 1.87% during 2017 (December over December).

The Regulation to disburse the restricted surplus held in the Pension Adjustment Account over a five-year period commencing with the Cost of Living Adjustment (COLA) granted effective July 1, 2018 was enacted on May 18, 2018.

The restricted surplus disbursal increased the 2018 COLA by 0.20%, resulting in a total COLA of 1.35% effective July 1, 2018. The balance of the restricted surplus will be disbursed in equal amounts over the following four years, ending with the COLA effective July 1, 2022. We estimate that COLA would increase by a further 0.17% on average from 2019 to 2022, for a cumulative increase of between 0.8% and 0.9% by the end of the five-year disbursal period. Actual increases will, however, depend on the economic and demographic conditions that occur during the disbursal period.

You can compare COLAs granted since 1977 by reviewing the historical COLA chart.

What is COLA?

COLA payments are meant to offset inflation. Since 1977, all member contributions have been divided into two accounts. The majority goes into the "basic" account that pays pensions; the balance goes into the Pension Adjustment Account (PAA) which funds half the cost of living adjustment. The other half is paid by the Province.

When do I receive the COLA?

You are entitled to your first COLA in the 13th month after you have received your pension for 12 months. The first COLA will be pro-rated for the number of months you have received a pension in the previous calendar year. Further COLA will be paid each July thereafter based on the determined adjustment.

Annuities are not entitled to a COLA.

How is it determined?

The maximum amount of COLA that can be paid each year is the lesser of: (a) the change in the Consumer Price Index for Canada - December over the previous December, and (b) the amount the PAA can afford.

Do I get a COLA every year?

There is no guarantee of a COLA.

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 2/3 of the COLA payment - that includes the cumulative COLA from the date your pension started to the present date, as well as for future COLAs 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 a $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
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