OMERS announced that pensions will increase by 1.81% as of January 1, 2013.
Inflation protection is an important feature of OMERS pensions. Each January, OMERS pensions increase by the average increase in the Consumer Price Index (CPI), to a maximum of 6%. If this figure is greater than 6%, the excess would be carried forward to the next year.
Members whose pensions began in 2012 will receive a pro-rated increase.
OMERS determines the annual pension increase using the monthly average of the CPI for the 12-month period of November 2011 to October 2012. This is compared to the average for the same period the previous year. The percentage difference determines the increase for pensions.
Here’s how this year’s increase was calculated:
CPI average 12 months (Nov 2011 to Oct 2012) – 1 x 100 = % pension increase
CPI average 12 months (Nov 2010 to Oct 2011)
121.51 – 1 x 100 = 1.81% (rounded to two decimal places)
The CPI measures changes in the cost of living. It is based on the price of a fixed “basket” of goods and services that an average Canadian household would buy in a given month, including food, shelter, clothing, transportation, and health-care expenses. For more about CPI, please visit www.statcan.gc.ca.
In late December 2012, OMERS will send an Annual statement of pension to retired members and survivors, with their updated pension amount for 2013.