Updates to your Pension Payments due to Income Tax Changes
You may have noticed differences in your pension payment starting July 1, 2025. This change is the result of updated federal and provincial income tax rates, and we want to help you understand what’s behind the adjustment.
What’s Changed
Federal tax rate
The federal government reduced its base income tax rate from 15% to 14%, effective July 1, 2025. This new rate was applied to your pension payment.
Alberta provincial tax rate
On July 1, 2025, Alberta introduced a new 8% provincial income tax rate on income up to $60,000 – effective January 1, 2025 – down from the previous 10%. In 2026, this applies to annual Alberta income above the base exemption of $22,769 up to $61,200.
Because this change was applied retroactively to cover the full year after taxing pension payments at the original 10% for six months, your pension payments from July to December 2025 included:
- A 6% withholding rate, made up of:
- the new 8% provincial tax rate, and
- a temporary 2% reduction to account for the higher rate that was charged from January through June.
What does this mean?
Beginning January 2026, your pension will reflect the standard 8% provincial withholding rate, with no retroactive adjustments. If you were receiving a pension in 2025, this change from a 6% tax rate to an 8% tax rate may have caused your net monthly pension increase in 2026 to appear smaller than expected or may even have caused your net monthly pension payment to have decreased compared to your December 2025 pension payment.
You will notice, however, that your pension payments will be higher than the payments from January to June, 2025.
Please be assured that your 2026 Cost‑of‑Living Adjustment of 1.2% was applied correctly, and your net monthly pension amount is accurate.
If You Live Outside Alberta
If you reside in another province, the federal tax change still applies. Your provincial tax withholding, however, is based on the tax rates of the province where you live.
2026 COLA
The Cost of Living Adjustment for 2026 is 1.2% on base pension. This increase was effective as of January 1, 2026 and was automatically applied to your pension. Members who retired during 2025 will receive a prorated portion of this increase. Those who retired in, or prior to, 2024 will receive a full COLA.
COLA is currently granted at 60% of the increase in the Alberta Consumer Price Index (ACPI).
Tax Slips and Annual Pension Statements
In 2026, you must access your tax slips and annual pension statements through Your Pension Profile on www.pspp.ca.
Register today for Your Pension Profile (YPP) and select email as your preferred communication method. Please ensure your information is up to date so you can receive an email notification when your tax slip and annual pension statement are available online.
If you have difficulties logging in, please see our step by step guide at https://www.pspp.ca/members/videos-forms-resources/your-pension-profile/.
If you prefer to receive documents by mail in the future, you will need to call the Member Services Centre each year to request a printed copy. Mailed copies will only be available upon request after the documents become available.
Your annual pension statement will be available online by January 31st. Your tax slip will be available online by February 28th. This is the busiest time of year for the Member Services Centre call centre. If you don’t want to wait on hold, you can access your tax information any time through Your Pension Profile.