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Inflation protection
- Members
- How your plan works
- Inflation protection
Cost of living increases
Once you retire, your monthly pension earned under UPP may increase to protect against increases in the cost of living.
What is inflation protection?
Inflation protection, also known as indexation, is a UPP benefit that helps preserve the value of your pension over time and keep pace with the rising cost of living through annual increases based on changes in the Canadian Consumer Price Index (CPI). The term indexation is also used to describe your pre-conversion pension provisions, which may follow different rules not tied to the CPI.
What is the Consumer Price Index (CPI)?
To measure changes in the cost of living, Statistics Canada tracks the price of a fixed basket of goods and services typically purchased by Canadian households. Each month, it compares the average price of that basket to the previous month.
This measure is called the Consumer Price Index (CPI). It is used as an indicator of how consumer prices are changing, and the rate of inflation in Canada.
You can find more information about the CPI on the Statistics Canada website .
Does UPP offer inflation protection?
When you retire and begin receiving your pension, the portion of your pension earned on and after your employer joined UPP (your UPP pension) is subject to funded conditional indexation. This means that any increase will be determined by UPP’s Joint Sponsors. UPP’s target funded conditional indexation is 75% of the increase in CPI for Canada but may differ based on the Plan’s overall financial health and Funding Policy. Since UPP’s inception, we’re pleased to have provided the full 75% of the CPI increase each year.
Indexation is not guaranteed, meaning if an indexation adjustment is made in any given year, it does not necessarily mean an adjustment will be made in any future year. Once the indexation adjustment has been made, it is permanently applied to your retirement income, and your pension earned under UPP will never be reduced.
If you have pre-conversion pension service
As part of the conversion, UPP continues to follow the indexation provisions of your prior plan for your pre-conversion pension. This includes how and when any adjustments are determined/calculated and paid. If you had already retired when your prior plan joined UPP, your entire pension continues to be indexed based on your prior plan’s terms.
If you were a member of your employer’s prior pension plan before they joined UPP, your pension may have two parts:
- Your pre-conversion pension: the portion you earned before your employer joined UPP, and
- Your UPP pension: the portion you earned on and after your employer joined UPP.
Prior plan indexation schedule:
- University of Toronto: July 1
- Trent University: July 1
- Victoria University: July 1
- University of Guelph: September 1
- Queen’s University: Effective September 1, paid December 1
For more information on how indexation is determined for your pre-conversion pension and when it’s applied, please refer to your Pre-conversion guide.
What is the inflation protection increase for 2026?
For 2026, UPP is providing indexation at the full 75% of the CPI increase, which means members receiving pensions (including survivors and dependents in pay) will receive an increase of 1.49% on the UPP portion of their pension effective January 1, 2026.
Determining the inflation protection increase for January 1, 2026
Each year, UPP looks at changes in the cost of living using Canada’s CPI. We compare (a) the average CPI over the most recent 12 months (measured from October to September) with (b) the average CPI from the 12 months before that. The difference shows how much prices have increased, and UPP applies 75% of that change to determine your inflation protection rate.
(a)= 163.28
(b) = 160.09
=
Increase in CPI
1.99%
75% of the 1.99% increase = 1.49%
Who receives UPP’s inflation protection increase for 2026?
All members, survivors, and dependents who began receiving a pension before 2026 and earned some or all of your pension after your employer joined UPP will receive the 2026 inflation protection increase.
This increase is only applicable to the portion of your pension earned after your employer joined UPP.
Frequently asked questions
My pension plan converted to UPP. Why doesn’t this indexation apply to my pre-conversion pension?
As part of the conversion, UPP continues to follow the indexation provisions of your prior plan for your pre-conversion pension. This includes how and when any adjustments are determined/calculated and paid. If you had already retired when your prior plan joined UPP, your entire pension continues to be indexed based on your prior plan’s terms.
If you were an active member of your employer’s prior pension plan before they joined UPP, your pension may have two parts:
- Your pre-conversion pension: the portion you earned before your employer joined UPP, and
- Your UPP pension: the portion you earned on and after your employer joined UPP.
Your pre-conversion pension will continue to be indexed based on your prior plan’s terms and your UPP pension will be indexed based on UPP’s inflation protection increase for 2026.
How much does my pre-conversion pension increase this year?
Your pre-conversion pension will be increased based on the indexation provisions of your prior plan. You’ll receive a letter from UPP closer to when indexation is applied to your pre-conversion pension, notifying you of any change to your pension amount and when it will take effect.
Prior plan indexation schedule:
- University of Toronto: July 1
- Trent University: July 1
- Victoria University: July 1
- University of Guelph: September 1
- Queen’s University: Effective September 1, paid December 1
For more information on how indexation is determined for your pre-conversion pension and when it’s applied, please refer to your Pre-conversion Guide.
Why is my increase less than 1.49%?
If your pension payments became effective in 2025, the indexation amount is prorated based on how many months your pension was in that year. For example, if your pension was effective July 1, 2025, your indexation is based on the six months you received a pension in 2025, and you’ll receive 50% of the 1.49% increase.