Did you know pension reform in 2014 changed how your average salary is calculated? Your average salary is now based on your earnings over your entire career. Because of this, the Plan annually adjusts all prior year earnings to offset the effects of inflation. This adjustment is known as salary indexation and your average salary is very sensitive to the indexation amount.
The Plan annually calculates the maximum amount that may be awarded (known as the target salary indexation). This is typically known by April each year and applies to the following pension year. For 2022, the target salary indexation is 7.15%.
The extent of the Plan's surplus determines how much of the target salary indexation the Plan can afford. As this will be known by June 30th, check back here in July to find out how much of the 7.15% target will be awarded. Those employees who remain active to the end of 2022 will receive the full impact of this indexation award.