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 may 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 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 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.
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 do not return to work at the end of my leave of absence, but would like to receive a Buyback Proposal? A: If you are on a leave, you can initiate the Buyback Proposal process at any time by submitting a completed Service Record (Contributions-Based Cost Application) to PSPP. If you are thinking of retiring, it is recommended to apply for a Buyback Proposal at least 3 – 6 months before you retire because buyback payments will not be received after you reach your pension commencement date. Note that the deadline to apply for a Buyback Proposal is within 30 days of the date you ceased participating in the Plan.
Q: What if I change to a position with my employer where I am no longer eligible to participate in PSPP but would like to receive a Buyback Proposal? A. You must apply to purchase the leave period within 30 days of the date you became ineligible and stopped participating in the Plan.
After any Buyback Proposal is created, you will have 180 days to purchase the service – as long as your funds remain in the plan and you do not start collecting your monthly pension. If you withdraw your funds or reach your selected pension commencement date before a buyback purchase is fully paid, your service will be credited based on what you have paid for up to that date.
How Combined Pensionable Service (CPS) Affects Buyback Proposals
If you have a CPS relationship, please click here.