Pension Increase Effective January 1, 2020

Active, deferred and retired members of The United Church Pension Plan will see some increases for 2020.

Active Members

Your “accrual rate” (rate at which pension credits are earned) will increase to 1.85% of pensionable earnings in 2020 only.

Each year that you work for a participating employer and contribute to the Plan, you earn or “accrue” a pension credit. The accrual rate is the percentage of your pensionable earnings that you earn as a pension credit.

  • From 2013 to 2019, the accrual rate was 1.4 percent.
  • In 2020 it was 1.85 percent (temporary increase).
  • In 2021, the accrual rate will return to 1.4 percent.

At the end of your career, the annual pension credits earned each year will add up to the total annual pension you will receive every year for the rest of your life. So, the higher amount earned in 2020 will continue to benefit you for the rest of your retired life.

Deferred Members

You will receive a 4 percent increase (subject to Income Tax Act limits) to your earned pension.

If you are a deferred member—that is, you terminated employment but left your entitlement in the Plan—the increase will be calculated and shown on your pension statement.

Retired Members

You will receive a 4 percent increase (subject to Income Tax Act limits) to your earned pension.

The increase will be added to your April 2020 pension payment, retroactive to January 1, 2020. The increase is taxable, just like your current pension payment. Your May payment will not include retroactive amounts, so it will be the amount you’ll receive going forward. For questions around the “take home” or net amount of your payment, please contact RBC at 1-800-668-1320.

The Income Tax Act requires that ad-hoc increases be limited to the increase in the Consumer Price Index (CPI) since the date of pension commencement.

  • If your pension commenced before January 1, 2018, your increase will be 4 percent, since the increase in CPI since that time is over 4 percent.
  • If your pension commenced on or after January 1, 2018, your increase is limited to the percentage increase in CPI as shown below.
Date of First
Pension Payment
Percentage
Increase
December 2019 0.07
November 2019 0.44
October 2019 0.51
September 2019 0.81
August 2019 0.73
July 2019 0.73
June 2019 1.1
May 2019 1.03
April 2019 1.33
March 2019 1.63
February 2019 2
January 2019 2.31
December 2018 2.31
November 2018 2.54
October 2018 2.38
September 2018 2.69
August 2018 2.61
July 2018 2.77
June 2018 3.23
May 2018 3.39
April 2018 3.46
March 2018 3.54
February 2018 3.62
January 2018 3.85

CPI has been seasonally adjusted to minimize the fluctuation, but some fluctuation is unavoidable. You may notice that an October 2018 retiree will get a slightly lower increase than a November 2018 retiree. This is because the change in CPI from November 2018 to January 2020 is 2.54 percent, while the change from October 2018 to January 2020 was slightly lower at 2.38 percent.