The Consumer Price Index (CPI) is the most commonly used measure of inflation. Like most pension plans, CAAT uses the CPI as the basis for calculating the annual increase to pensions.

The CPI calculation compares the CPI of the current month with the CPI of the same month last year. This may result in sharp fluctuations in the CPI reported each month.

CAAT calculates its inflation protection rate annually, not monthly. It compares the average 12-month CPI (from October to September) each year. This ‘averaging’ methodology reflects the overall trend of inflation but dampens month-to-month volatility seen in the monthly rates.