Federal Retirees Pension Increase 2024: What Will be the Increase and Will it be According to the Expectations?

In Canada, the pension amount for the eligible residents (old age Canadians) and other benefits are provided as help by the government for the living costs, as the income by their jobs either reduce or come to an end completely. This is also done to provide help to people who are either the survivors or who are the spouses and/ or the receiver’s common law relationship partners. These pension amounts are decided for different income levels, and it is also decided by the number of years spent in Canada.

The good news is that the pension amounts are checked every year so that they are able to match the increase in the living costs, and as per the CPI values, these pension amounts are changed annually. This is revealed in the news after the Treasury Board Secretariat in Canada provides all the details for indexing of pension for the next year to the National Association of Federal Retirees, and this index increase gets to become effective from 01st January for the next year with federal public Canadian pensions.

Federal Retirees Pension Increase 2024

For the pension increase that the retired members and/ or their survivors are going to benefit from in 2024, the data for the Consumer Price Index, or the CPI data is used, which is received from Statistics Canada. As per the reports, the indexation rates which are going to be beginning with effective date of 01st January 2024 has been set to be 4.8 percent. It must be noted that the pension increases for the pension eligible retired residents, and their survivors are decided using the 12-month averages of that year’s monthly values given by the CPI.

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This value is then compared with the 12 month average of the CPI values for every month from the previous year. This comparison is also decided using the months of CPI values from 01st October to 30th September as the 12 months period, and the change in increase rate is for the January month which follows. For the Canadian items, this calculation is used using the CPI which is not adjusted seasonally, and the data used for 2024 pension increase is as follows:

TABLE 1 –

Month & YearCPI %
2021 October143.9
2021 November144.2
2021 December144
2022 January145.3
2022 February146.8
2022 March148.9
2022 April149.8
2022 May151.9
2022 June152.9
2022 July153.1
2022 August152.6
2022 September152.7
Total1786.1
Monthly Average148.8
Federal Retirees Pension Increase 2024: What Will be the Increase and Will it be According to the Expectations?

TABLE 2 –

Month & YearCPI %
2022 October153.8
2022 November154
2022 December153.1
2023 January153.9
2023 February154.5
2023 March155.3
2023 April156.4
2023 May157
2023 June157.2
2023 July158.1
2023 August158.7
2023 September158.5
Total1870.5
Monthly Avg.155.9

Federal Retiree Pay Increase 2024

As mentioned, the pension increase rate or the indexing rate for the next year or 2024 is going to be on the same side of the percentage increase of the monthly CPI average. For those who don’t know, this value is obtained after subtracting the monthly CPI Average for the first year (the previous year October 2021-September 2022) from the average CPI values of the second year (the year just ended from October 2022-September 2023), then dividing this value by the CPI average monthly for the year ended, and ending it with a multiplication with 100 as shown for the values from TABLE 1 and TABLE 2 above:

Starting with 155.9-148.8= 7.1, then (7.1/ 148.8)*100= 4.8%, we get the indexing rate for the year 2024 as 4.8%. For the 2023 calendar of pension year, the important dates starting from November 2023:

MonthLast Day for Banking Information ChangesPayment Transferred
November 20237th Nov 2328th Nov 23
December 20235th Dec 2327th Dec 23
January 20249th Jan 2429th Jan 24
February 20246th Feb 2427th Feb 24
March 20245th Mar 2426th Mar 24
April 20244th Apr 2426th Apr 24
May 20247th May 2429th May 24
June 20244th Jun 2426th Jun 24
July 20244th Jul 2429th Jul 24

Federal Retiree Raise 2024

For the eligible residents, the pension options have also included the likes of Immediate Annuity, Annual Allowance, Deferred Annuity, Transfer Value, and Return of Contributions, and not only that, these are also decided based on the years of job experience, time in Canada, etc. It has been seen that the big question for these Federal Retirees, for now, is about the COLA or the adjustments which will be made for their 2024 Annuity Payments soon. Due to inflation in Canada, the COLA values in recent years have been high. The Cost of Living Adjustments (or COLA) for 2024 and the details, how much change is expected, etc. are mentioned below.

For the year 2022, the COLA value was 5.9%, and this value has been the highest in about 40 years when it came out. But the 2023 COLA value was about 8.7%, and it must be noted that this was the highest COLA value since 1981. Following this, the 2024 COLA value has been announced recently to be equal to 3.2%. This is important as this is going to increase the Canadian Monthly Annuity Payments, and this wait is not going to be long because for every year the COLA affects the payments of January from next year.

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Federal Retirees Pay Raise 2024

For getting the full COLA benefit, the resident must have received the annuity payments for 12 months before it. For those who have not completed 12 months will be eligible for a prorated COLA amount, which are about a twelfth for every month in which the eligible resident has received their annuities. So, if a federal retiree has received the annuity payments from December 2022, then they will get the full COLA 2024 added to their annuity payments next year.

For the Federal Employees Retirement System, or the FERS Special Benefits, if the CPI Increase Value is 2 percent or less than that, then the COLA Increase Value is the same. But, if this increase gets between 2 percent and 3 percent, then the COLA Increase is set to be 2 percent. For CPI Increase Value more than 3 percent, the value for COLA is one percent less than CPI Value in their increment. So, for the year 2024, if the Federal Retirees are eligible for the full COLA, then the addition of 2.2% COLA next year will be done for their annuity payments.

But for the Federal Retirees who are a part of the Civil Service Retirement System, the percentage increase limit is used for the existing payment before the deductions on this amount get a chance to be withheld, which is to say, that the payment is rounded to the next dollar. It must be noted that the COLA 2024 for the benefits of the Federal Retirees, and the Federal Pay Raise in 2024 are not going to be the same because the pay raise is not for the retirees.

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