Replace guaranteed indexing with conditional indexing for future pensions
Under the current Plan, pensions paid to retirees rise automatically in step with annual increases in the Consumer Price Index (CPI) – a standard measure used to determine the amount that a typical consumer pays for a basket of retail goods and services. This is called “guaranteed” inflation indexing.
To help improve the Plan’s sustainability substantially, the SC Board is exploring the possibility of introducing “conditional indexing.” Unlike “de-indexing,” conditional indexing provides annual pension increases when the Plan is financially healthy. If the Plan gets into financial trouble, indexing can be reduced (or suspended) on a temporary basis.