Buyback Proposal Process
Your pensionable service is a key part of the formula used to calculate your future pension. The more service you have when you retire, the larger your pension will be. You earn service for every day that you contribute to the Plan, but in some cases, you may also repay leave service or buy prior service.
If you were off work, unpaid, for a period of time (a Leave of Absence), this will create a gap in your pensionable service. You may be able to repay contributions for leave service to ensure there is no service gap.
If you were paid out for the service you earned with another Registered Pension Plan (RPP), you may be able to use those funds to buy pensionable service in PSPP.
You can repay contributions for a leave or buy prior service by receiving a Buyback Proposal.
What Are My Payment Options?
Your Buyback Proposal will list all available payment options:
- Pre-authorized debit. You have an option to make a lump sum payment or your first installment payment through the Buyback Purchase tool in Your Pension Profile by completing a pre-authorized debit form,
- Regular payroll deductions arranged with your employer (according to the number of installments you choose on your Buyback Election),
- Payment via cheque for a lump-sum payment of either the total Buyback amount or a portion of it, or
- Transfer of funds from a registered retirement savings vehicle such as a Registered Retirement Savings Plan (RRSP) or Locked-In Retirement Account (LIRA).
Payments must be made according to the schedule on your Buyback Proposal. You can also pay for the entire amount in one payment. If you miss these timelines, you may still be able to purchase the service for a higher cost.
How Can I View My Buyback Proposals?
Active Buyback Proposals that are available for purchase can be viewed by logging in to Your Pension Profile at the top right corner of the PSPP website and selecting Buyback Purchase from the drop-down menu.
Frequently Asked Questions about Buyback Proposals
We’ve compiled some commonly asked questions to help you navigate this process:
Q: Can I pay for only a portion of my service? A: Yes, this is sometimes called prorating your service. For example, if the cost of buying one year of service was $10,000 and you decided to stop making payments after paying $5,000, you would receive credit for about half a year of service (before any interest charges are taken into account).
You can choose to purchase only a portion of your service before making any payments or after you have already begun to make payments.
Q: What if I leave PSPP before I complete making payments? A: Regardless of the timelines provided above, if you plan to retire, all buybacks must be paid for in their entirety prior to your pension commencement date. This means that no further payments will be accepted on or after your pension commencement date. If the buyback is not paid in full prior to your pension commencement date, the buyback will be prorated and only pensionable service that is paid for will be credited.
If you are on a Leave Without Salary (LWOS) and decide to retire, there will not be an option to apply to purchase the LWOS service on or after your pension commencement date.
Q: What if I want to retire before I complete making payments? A: If you are retiring, you must complete any outstanding buyback payments prior to your pension commencement date. If the Buyback is not paid in full before your pension commencement date, the amount of service will be prorated to reflect the payments that have been made.
Q: What if I do not return to work at the end of my leave of absence or if I change to a position with my employer where I am no longer a member in PSPP but would like to start a Buyback? A: If you do not return to work at the end of your leave of absence, or if you change to a position with your employer where you are no longer a member in PSPP, you must apply to purchase the leave period within 30 days of the day you stop participating in the Plan.
How Combined Pensionable Service (CPS) Affects Buyback Proposals
If you have a CPS relationship, please click here.