Learn about buying service
Learn about buying service for leaves of absence and other times you were not contributing to the plan. Buying service can potentially increase your future pension.
You may be able to increase your pension by buying service for periods when you were not contributing to the Public Service Pension Plan.When you buy service, you increase the amount of pensionable service that counts towards your pension. This may increase the pension you receive when you retire or allow you to retire earlier.
For example, if you work full time and decide to take a year of unpaid leave, you will have one less year of pensionable and contributory service. If you decide to buy this service, your pensionable service will increase, which may increase your pension when you retire. Buying this service would also add one year to your total contributory service. We use your contributory service to determine if you are eligible for an unreduced pension.
There are several ways to buy service and potentially increase your pension:
- Buying service for an approved leave of absence, such as a maternity, parental or general leave
- Buying service for a period of reduced pay
- Buying non-contributory service for a period when you were not making pension contributions (such as when you were working as a term, contract or auxiliary employee)
- Buying past service if you worked for your employer before it joined the plan
- Buying arrears for a period when you were eligible to contribute to the plan but did not
A note about long-term disability leave
You do not need to buy service if you are away from work on an approved long-term disability leave since you continue to accumulate pensionable and contributory service.
What service cannot be bought?
You cannot buy all types of service. For example:
- You cannot buy more service than you would have normally received while working. This means you cannot be a part-time employee and buy service equivalent to full time.
- You cannot buy service that would put you over the income tax limits for pension and RRSP contributions.
- You cannot buy service if you have more than 35 years pensionable service.
How much will it cost?
The cost of buying most service types is based on:
- The number of months of service you want to buy
- Your current monthly salary (calculated as full-time equivalent)
- The current employee and employer contribution rates
Sign in to My Account and use the personalized purchase cost estimator to find out how much it may cost. You can also send us a Purchase of service application form, and we will send you a statement showing your cost.
How much will it increase your pension?
Sign in to My Account and use the personalized purchase cost estimator to see how buying service might increase your monthly pension.
Is there a deadline for buying service?
There is a five-year deadline for buying all service types. The type of service you buy determines when the five-year period begins.
Since the cost is based on your salary and the contribution rates when you apply, it's a good idea to buy service as soon as possible rather than waiting until the deadline.
If you are leaving your job with a plan employer, you must apply to buy the service before you end your employment.
What is the process?
Start by getting an estimate of the cost of buying service. Sign in to My Account and use the personalized purchase cost estimator to see how much it might cost and how buying service might affect your pension.
For some service types, to get an estimate, you will need to complete the Purchase of service application form. The estimator will pre-populate the form with your personal data if you wish to apply.
If you decide to buy service, complete the application form and submit it to your employer. Your employer will verify the information on your application, provide other details and send the application to us.
We’ll send you a statement that shows the cost of buying service and the payment deadline.
Once you buy service, we will add it to your record.
Are there tax considerations?
When you buy service, the value of your pension increases. This can affect your tax situation. You may want to seek advice from an independent financial planner before deciding to buy service.
What if you take your money out of the plan?
If you leave your job with an employer that participates in the plan, you can keep your contributions in the plan until you apply for your pension. If you decide to withdraw your contributions and are applying to buy service, you must wait until the process of buying service is finalized before we can process your withdrawal or transfer request.