The CAAT Pension Plan’s inflation protection rate for 2018 will be 1.17%. The increase takes effect January 1, 2018.
This inflation protection increase applies to pensionable service earned after 1991, and is applied to pensions, bridge benefits, and survivor pensions in payment, as well as deferred pensions.
If you retired in 2017, the increase to your pension starting in 2018 will be pro-rated to reflect the months in 2017 your pension was paid.
Inflation protection is cumulative. The increases previously applied to your lifetime pension remain a permanent part of your pension, and the additional increase in 2018 is added to the previous year’s lifetime pension.
How we calculate inflation protection
Two periods of service are used in the calculation:
- On service earned between 1992 and 2007, inflation protection increases are guaranteed and will be granted indefinitely.
- On service earned after 2007, the granting of inflation protection increases is conditional on the Plan being fully funded. As a result of the January 1, 2017, filed actuarial valuation, which showed the Plan to be fully funded, conditional inflation protection increases will be granted annually until January 1, 2020. Any increases beyond 2020 will be determined based on future filed actuarial valuations and the Plan’s funding level at that time.
The inflation protection formula compares the year-over-year percentage change in the average Consumer Price Index (September to September increases), then calculates 75% of this amount. The result is the inflation protection rate applied to your pension as shown above. The maximum inflation protection rate in a given year is 8%.
We’ll be in touch
Look for a letter in the new year showing your pension amount with the 2018 inflation protection increase, and later in the spring, you’ll receive your Retired Member Annual Statement. This important document provides you with a breakdown of your pension amount and any amounts that are deducted (e.g. for income tax).
Remember that your 2018 Retired Member Annual Statement will include our Pension Confirmation form for you (or the holder of your valid Power of Attorney for Property) to use to keep us up to date so that your pension payments continue. Be sure to complete the Pension Confirmation form as soon as you receive it, and mail it back to the CAAT Pension Plan in the envelope provided, to ensure no interruption in your pension payments.
For more information, visit the Inflation Protection page or to learn more about your Retired Member Statement and the Pension Confirmation form.