1. Inflation protection can help protect the buying power of your pension in retirement.

2. FUNDING VALUATION 2
Financial Check Up
Independent experts do a financial check up of the pension plan every year. The check up is called a funding valuation.
How much inflation protection you get depends on three key factors:
The base inflation adjustment, which reflects the annual increase in the cost of living.
The plan’s funding status. This determines how much of the base inflation adjustment the pension plan can afford to pay.
When you worked and earned pension credit.
Let’s look at each of these factors in more detail.

3. FUNDING VALUATION 3
Assets & Liabilities
The valuation compares projected pension assets to liabilities. Assets are what we own. Liabilities are what we owe in pensions to our members.

4. Factors Affecting Assets & Liabilities
FUNDING VALUATION 4
Factors Affecting Assets & Liabilities
Many factors affect pension assets and liabilities. Key ones include returns on plan investments, interest rates and member life expectancy. The valuation takes these and many other variables into account.

5. Key Positions & Outcomes
FUNDING VALUATION 5
Key Positions & Outcomes
The valuation can show three key funding positions or outcomes:
A balanced state
A surplus
A shortfall

6. THREE KEY FUNDING POSITIONS OR OUTCOMES6
A Balanced State
The pension plan is balanced when projections show we have enough money to meet pension obligations looking out 70 years and beyond.

7. THREE KEY FUNDING POSITIONS OR OUTCOMES7
A Surplus
Even better is a surplus. This occurs when projections show we have more than enough money to meet all pension obligations.

8. THREE KEY FUNDING POSITIONS OR OUTCOMES8
A Shortfall
But when future pension costs are greater than pension assets, we have a projected funding shortfall.

9. RESTORING BALANCE 9
Lower Pension Costs
Providing smaller cost-of-living increases can help lower pension costs and restore balance.

10. RESTORING BALANCE 11
Larger Increases
When there’s a funding surplus, larger cost-of-living increases can be paid with confidence.

11. Conditional Inflation Protection
RESTORING BALANCE 11
Conditional Inflation Protection
Making inflation protection conditional on the plan’s funding status is one way to keep the pension plan balanced. And that translates into retirement security for you.

12. I’m happy to answer any questions you may have.
You can also consult the resources listed on this slide.
MORE INFORMATION
• Visit the pension plan’s website at • Talk to your affiliate pension representative