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- NEWS
- November 28, 2024
UPP announces inflation protection increase for 2025
UPP is pleased to announce that UPP pensioners, survivors, and dependents in pay will receive an inflation protection (indexation) increase of 2.03% to the UPP portion of their pensions at January 1, 2025. Those currently receiving a pension will see the UPP portion of their monthly pension payments increase beginning January 1, 2025.
For those with service earned under a prior pension plan that converted to UPP, this increase will only apply to pensions accrued under UPP provisions for service on and after the date your prior plan joined UPP. For the portion of your pension earned under your prior plan, UPP honours the pension adjustment provisions of your prior plan, including how and when any increases are determined and paid.
Eligible members will receive a letter with further details in January 2025. To ensure you receive this important communication, visit the myUPP Member Portal to confirm your communication preference and contact details are up to date.
What is inflation protection?
Inflation protection is a valuable benefit designed to increase the amount of your monthly pension in pay through a cost-of-living adjustment based on the increase in the Canadian Consumer Price Index (CPI). The cost-of-living adjustment is also sometimes referred to as indexation.
What is the Consumer Price Index (CPI)?
Statistics Canada measures monthly changes in the cost of living. Each month, it examines the price of a basket of goods and services typically purchased by Canadian households and compares the ups and downs to the previous month. This is called the Consumer Price Index (CPI). The CPI is widely used as an indicator of the change in the general level of consumer prices and the rate of inflation. Find more information about the CPI on the Statistics Canada website.
How does UPP calculate the inflation protection rate?
When you retire with a UPP pension, you receive a secure retirement income for the rest of your life. Your defined benefit pension for UPP service includes annual conditional funded indexation of up to 75% of the increase in the Canadian CPI. In 2025, UPP is providing indexation at the full 75%, which means members receiving pensions (including survivors and dependents in pay) will receive an increase to their pensions accrued under UPP provisions of 2.03% at January 1, 2025.
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Determining the inflation protection increase for January 1, 2025:
(a)= 160.09
(b) = 155.88
=
Increase in CPI
2.71%
75% of the 2.71% increase = 2.03%
a) the CPI 12-month average (with each month determined at month end) for the period ending on the September 30 immediately before the January 1 effective date;
divided by
(b) the CPI 12-month average (with each month determined at month end) for the period ending on the September 30 immediately before the September 30 in (a) above.
Note: if (a) is less than (b), the increase in CPI shall be 0%.
The indexation paid by UPP is equal to 75% of the percentage change in the two averages of CPI.
Who receives UPP’s inflation protection 2025 increase?
All members who began receiving a pension earned under UPP (UPP pension) prior to 2025, including survivors and dependents in pay, will receive the 2025 inflation protection increase. UPP’s inflation protection increase is only applicable to the UPP portion of your pension for service on and after July 1, 2021.
Why is my increase less than 2.03%?
If you started to receive your pension in 2024, your indexation amount is prorated for the length of time you received a pension. For example, if you retired in June 2024, your indexation is based on the six months you received a pension this year, and you will receive 50% of the 2.03% increase.
My pension plan converted to UPP. Why doesn’t this indexation apply to my pre-conversion pension?
As part of the conversion, UPP honours the pension adjustment provisions of your prior plan for your service earned under that plan. This includes how adjustments are determined/calculated and when they are paid. If you had already retired when your prior plan converted to UPP, your entire pension is adjusted based on your prior plan’s terms.
If you have prior service under a pension plan that converted to UPP, your total pension benefit comes to you as one payment but has two parts – one portion attributable to the service earned on your prior plan (your pre-conversion pension), and the portion attributable to what you earned under UPP (your UPP pension).
How much does my pre-conversion pension increase this year?
Your pre-conversion benefit will be increased based on the pension adjustment provisions of your prior plan. You will receive a letter from UPP notifying you of the impact to your pension, if any, and when it will be added to your pre-conversion benefit.
For details on how indexation is determined for your pre-conversion pension and when it is applied, please contact our Member Services team via secure message.
Have additional questions?
Please contact our UPP Member Services team, available:
Monday to Friday, 8:30 am – 5 pm ET.
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