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Cost of Living Adjustment
Cost of Living Adjustment (COLA) for 2019 is 0.85%
How is COLA determined?
COLA for pensioners under the Members of the Legislative Assembly Pension Plan is set in accordance with indexing credited to allowances payable under the Public Service Superannuation Plan (PSSP).
COLA (commonly known as Indexing) is set by the Public Service Superannuation Plan Trustee Inc. (Trustee).
The Trustee is required to conduct a funded-health review of the PSSP every 5 years, in accordance with provisions in the Public Service Superannuation Act (PSSA). The purpose of this review is to determine the PSSP’s capacity to afford annual cost of living adjustments and to review the adequacy of contribution rates. The last funded-health review was completed by the Trustee in 2015.
After the 2015 funded-health review, the Trustee made the following decisions:
- Approved a COLA set at 0.85 per cent per year (January 1, 2016 to December 31, 2020), and
- Confirmed no changes to Plan member and employer contribution rates will be made
The highest priority during the funded-health review was given to the PSSP’s long-term financial health and sustainability.
The guidelines used to determine the granting of any COLA are detailed in the Funding Policy of the PSSA. The Funding Policy states: “If the funded ratio of the PSSP is between 100 per cent – 110 per cent, the Trustee may provide COLA so long as the PSSP’s funded ratio is not projected to fall below 100 per cent at the end of the 5-year cycle, including the impact of granting COLA throughout the 5-year cycle.”
The 5-year funded-health review was conducted by the Trustee and with the advice of the PSSP’s actuary.
When is the next 5-year funded-health review?
The Trustee’s next review of the PSSP’s funded-health will be in 2020, for the 5-year cycle starting January 1, 2021 to December 31, 2025.
At this time, COLA will be dependent upon the PSSP’s funded ratio as of December 31, 2019. COLA may only be provided if the Plan is fully funded and if determined to be prudent by the Trustee.