Inflation Protection

As a HOOPP pensioner whose pension or deferred pension is built on contributory service earned before 2006, you’ll receive a cost of living adjustment (COLA) each April to help you protect the purchasing power of your pension. It will equal 75 per cent of the previous year’s increase in the Canadian consumer price index (CPI), to a maximum CPI increase of 10 per cent.

So if inflation – as measured by the CPI – increases by 3.0 per cent, your pension will automatically increase by 2.25 per cent.

Depending on the Plan’s financial status and other factors, HOOPP’s Board of Trustees can approve an annual increase above the guaranteed level up to 100 per cent of the increase in the previous year’s CPI (again to a maximum CPI increase of 10 per cent).

HOOPP’s Board provided 100 per cent inflation protection from 1996 to 2002. It has also provided cost of living catch-up adjustments over the years. One such adjustment in April 2002 brought all HOOPP pensions up to the level they would be had they received 100 per cent inflation protection since they were paid.

When cost of living adjustments are applied, they are applied to all HOOPP pensions, including

• disability pensions
• deferred pensions
• pensions paid to qualifying spouse
• pensions paid to life pension – guaranteed 15 years (G-15) beneficiaries

If you began collecting your HOOPP pension part way through the year, you’ll receive only part of the annual increase in the year after your retirement. For example, if you start to collect a HOOPP pension July 1, you’ll get half the annual inflation increase the following year.

Inflation protection can have a significant impact on the power of your pension dollar. Check out the Power of inflation protection chart.

Changes affect those retiring in 2006 or later

HOOPP announced changes to its COLA in July, 2004. These changes will not affect pensioners or deferred pensioners who retired or elected a deferred pension before 2006, but do affect people who retire (or elect a deferred pension) in 2006 or later.

For any portion of the pension or deferred pension based on service accrued in 2006 or later, the amount of COLA will no longer be guaranteed. HOOPP’s Board will vote annually on whether to provide inflation protection on post-2005 service, and if there is an increase, how much it will be.

Such non-guaranteed, or ad hoc COLA increases can range from zero to 100 per cent of the previous year’s increase in the CPI, again to a maximum CPI increase of 10 per cent.