OMERS pensions that receive an annual inflation increase include normal and early retirement pensions, as well as survivor, deferred and disability pensions. The increase as of January 1, 2017 is 1.45%.
OMERS uses the monthly average of the CPI for a 12-month period ending in October, and compares it to the monthly average for the same period the previous year. The percentage determines the increase for pensions. For example, the inflation increase as of January 1, 2017 is 1.45%:
OMERS method of calculating the annual inflation increase is consistent with the method used by the Canada Pension Plan (CPP). OMERS rounds to two decimal places, while CPP rounds to one decimal place.
Since the year 2000, OMERS pensions have had an average annual increase of 1.9%.
For example, using an inflation assumption of 2% per year, an OMERS pension of $15,000 today, would be worth the following in the future:
A pension that didn't offer inflation increases would still be $15,000.
Your first increase is pro-rated to reflect the number of months you received a pension in 2016. The increase as of January 1, 2017 is 1.45%. So for example, if your pension started in February 2016, your 2017 increase would be 1.21% (which is 10/12 of 1.45%). In January 2018, however, you would receive the full increase.
To see the effects of inflation, try the Bank of Canada's inflation calculator.
OMERS helped me with… “Peace of mind, the confidence in knowing that my pension cheque will always be there and not be eaten away by inflation.”