Inflation Protection

Inflation is the tendency of items to increase in price as time passes. Pension plans can help offset the negative impact of inflation by providing inflation protection, also known as indexation.

Inflation protection - periodic increases to the amount of a pension payment - reduces the erosion of the buying power of your pension that inflation causes.

In the CAAT Plan, when members retire, their initial pension payment is called the "lifetime pension". Inflation protection, when it is granted, is added to the lifetime pension each year that the CPI has increased, and the new amount is the new lifetime pension. In other words, indexation is cumulative. Once inflation protection has been paid, it is a permanent addition to your retirement income.

Annual notification

Each year in December, retired members are sent a letter detailing the increase to their pensions (if any) for the upcoming year. The letter will show the amount of the inflation protection increase, the gross pension payments after any inflation protection increases have been applied, any adjustment for income tax, and the net payment as of January 1 in the following year.