Frequently Asked Questions

General

Q: What is a COLA?

A: A COLA, or Cost of Living Adjustment, is a payment that may be made to retired Pension Plan members in addition to their regular pension benefit payment to offset inflation.

Q: Why create the COLA Plan?

A: The HEPP Plan Text provides for the payment of COLA increases from the Pension Plan Fund on an “ad hoc” basis, only when there is sufficient surplus available.

A COLA was most recently paid in 2002.

The two new COLA Plan Funds are separate from the Pension Plan Fund, and will be dedicated to providing COLA benefit payments to retirees.

Q: How many COLA Plan Funds are there? How are they different?

A: There are two COLA Plan Funds – the Active Members Fund, and the Past Retirees Fund.

  • The Active Members Fund will grant COLAs to Pension Plan members who retired, or will retire, on or after October 1, 2009.
  • The Past Retirees Fund will grant COLAs to Pension Plan members who retired on or before September 30, 2009.

Contributions

Q: Who contributes to the COLA Plan? What are the contribution rates?

A: Active Pension Plan members and employers will each contribute the same amount.

Effective April 1, 2014:

  • Pension Plan members and their employers will each contribute 0.8% of pensionable earnings to the Active Members Fund.

Effective April 1, 2015:

  • The contribution rate will increase to 1.0% of pensionable earnings for both Pension Plan members and employers. The contributions will be allocated to both COLA Plan Funds, with 90% going to the Active Members Fund and 10% going to the Past Retirees Fund.

Q: Who set the contribution rates for the COLA Plan?

A: The contribution rates were established as part of the agreement negotiated by unions and employers.

Q: Can I opt out of contributing to the COLA Plan?

A: No, employers and employees are required to contribute to the COLA Plan.

Q: Will my individual contributions to the COLA Plan be refunded when I terminate my employment?

A: No, all contributions made to the COLA Plan are intended to be used to provide COLA benefits to retired Pension Plan members and are not refundable upon termination of employment, or death.

Granting of COLAs

Q: When will the COLA Plan first grant a COLA?

A: The earliest date a COLA may be granted is January 1, 2018, if sufficient funds are available.

Q: How often will the COLA Plan grant COLAs?

A: The decision to grant a COLA is subject to the financial status of the COLA Plan Funds. A COLA is not guaranteed to be granted every year.

Note: Although unlikely, a COLA that was granted may be withdrawn if the respective COLA Plan Fund is not able to support the continued payment.

Q: Will each COLA Plan Fund grant a COLA each year, and for the same amount?

A: A COLA is not guaranteed to be granted every year, and it is possible that one COLA Plan Fund may grant a COLA, while the other COLA Plan Fund may not grant a COLA. If granted, the amount of a COLA will depend on the financial status of the COLA Plan Fund that is granting the COLA.

Q: If the COLA Plan grants a COLA, how much will it be for?

A: If granted, the amount of the COLA will depend on the financial status of the respective COLA Plan Fund. The maximum COLA Plan benefit that may be payable in any given year will be two-thirds of the Canadian Consumer Price Index (CPI).

Sustainability & Investments

Q: Is the new COLA Plan sustainable?

A: The COLA Plan Funds were negotiated and designed for the specific purpose of providing COLAs to retired Pension Plan members. The HEPP Board will be diligent in its ongoing evaluation of the long-term sustainability of the COLA Plan. Before granting any COLA benefits, the Board will conduct annual reviews to track and evaluate the availability of funds, to monitor the effects of external factors, and to explore options available to ensure the COLA Plan Funds are best positioned for the future.

Q: How are the COLA Plan Funds invested?

A: Contributions to the COLA Plan Funds will be invested and managed by a HEPP COLA Investment Committee. HEB Manitoba will produce reports on each Fund’s performance and allocations each year.

Q: What happens to the money in the COLA Plan Funds if a COLA isn’t granted?

A: Contributions to the COLA Plan Funds are invested and managed by a HEPP COLA Investment Committee. If a COLA is not granted, contributions to the Funds remain invested according to each Fund’s investment strategy until there are sufficient funds to provide a COLA.

Personal Circumstances

Q: I have never contributed to the COLA Plan. Am I eligible to receive a COLA?

A: A Pension Plan member who receives a monthly pension payment is eligible to receive a COLA, if a COLA is granted.

  • The Active Members Fund will grant COLAs to Pension Plan members who retired, or will retire, on or after October 1, 2009.
  • The Past Retirees Fund will grant COLAs to Pension Plan members who retired on or before September 30, 2009.

A COLA is not guaranteed to be granted every year and will depend on the financial status of each COLA Fund.

Q: Will my contributions to the COLA Plan affect my personal investments?

A: The COLA Plan contributions will increase the contribution amount being remitted to over 18% of pensionable earnings, which is the maximum that the Income Tax Act allows. As a result, members will not be able to contribute as much to their personal Registered Retirement Savings Plans (RRSPs). For more information on tax implications, please contact a tax advisor or the Canada Revenue Agency.

Q: Where will I be able to see how much I have contributed to the COLA Plan?

A: You will be able to see the total amount of your individual annual contribution to the COLA Plan on the Annual Pension Statement that HEB Manitoba provides to you each year.

Alternatively, you can contact the payroll or benefits representative at your employer to help you calculate your individual contributions.

Q: Do I have to apply to receive a COLA?

A: No, you do not have to apply to receive a COLA. If you are receiving a monthly pension payment from HEPP and a COLA is granted, you will be notified of the change to your pension amount, and the COLA will be automatically included in your monthly pension payment.

Q: If I receive a COLA, will it affect my existing Pension Plan benefits in any way?

A: No. A COLA will not affect other Pension Plan benefits.

Q: Will my spouse/common-law partner be eligible to receive my COLA Plan benefit if our relationship breaks down before I retire?

A: In the event of a relationship breakdown before retirement, your former spouse/common-law partner will not be eligible to receive a COLA Plan benefit. Only retired Pension Plan members are eligible to receive a COLA Plan benefit.

Q: Will my spouse/common-law partner be eligible to receive my COLA if our relationship breaks down after I retire?

A: In the event of a relationship breakdown while in retirement, your spouse/common-law partner may be entitled to receive a portion of a COLA benefit you are receiving, as determined by the separation agreement you negotiate with your spouse/common-law partner.

Q: If a COLA is granted after I die, will my spouse/common-law partner or beneficiary receive the COLA?

A: Only retired Pension Plan members are eligible to receive a COLA. A COLA is not transferable to a spouse/common-law partner or beneficiary when you die.

© 2017 HEB Manitoba

 

Disclaimer - This website provides a basic overview of the Healthcare Employees' Pension Plan (HEPP) and the Healthcare Employees' Benefits Plan (HEBP) (collectively the HEB Manitoba Pension and Benefit Plans). Not all employers participate in all Plans. Please check your eligibility for benefits with your employer.

HEB Manitoba is a name notation registered by the Healthcare Employees’ Pension Plan – Manitoba and the Healthcare Employees’ Benefits Plan – Manitoba and under which each of their respective undertakings is carried out.

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