Fewer Than Two Years of Service

If you are younger than 65 and you leave PSPP before you have two years of pensionable service (including CPS or service you've purchased or transferred in), you will not be eligible to collect a pension at retirement. This is what the term "not vested" means.

If you leave the Plan, PSPP will send a Termination Statement with your options to the address we have on file. You will have 90 days to make a decision and let PSPP know; if you do not, your share of contributions with interest will be paid to you with income taxes withheld.

Leave Your Pension Contributions with Interest with PSPP

Leaving your pension contributions with interest in PSPP will allow you to add pensionable service to your existing service if you later rejoin the Plan.

If there is a chance you will be returning to a position with any PSPP employer, you may want to leave your share of contributions in the Plan.

Once you reach two years of pensionable service, you will be vested and eligible to receive a pension for the rest of your life as early as age 55.

Transfer Your Pension Benefit to Another Pension Plan

PSPP has transfer agreements with several other provincial and federal public sector pension plans.

If you start working for a new employer who participates in one of those plans, you may be able to transfer your PSPP service to that new plan.

Transfer Your Pension Contributions to an RRSP with No Taxes Withheld

Your share of contributions with interest can be transferred to a Registered Retirement Savings Plan (RRSP).  No income tax will be withheld from this transfer, and no T4A will be issued.

Receive a Refund of Your Contributions with Interest

Your share of contributions with interest will be paid to you by cheque or direct deposit, and income tax will be withheld. A cheque will be sent automatically if you do not respond to your Termination Statement within 90 days. After this payment, you will no longer have a benefit with PSPP.

How much income tax is withheld from my payout?

If you live in Canada, the amount withheld is based on this table:
$5,000 or less 10%
More than $5,000 up to $15,000 20%
More than $15,000 30%

A T4A will be issued with your payment to show how much additional income you have received and how much tax you have paid. The amount of tax withheld will be based only on the value of this payment. When added to your employment income for the year, you may be required to pay additional tax when you file your income tax return the following year.

If you are living outside of Canada when you receive funds from the Plan, the amount withheld will depend on that country's income tax rates.

Time Sensitive Considerations

Leaves of Absence

You have 30 days from the date you leave the Plan to apply to purchase a leave of absence. If you are already paying for a leave of absence, you have 90 days* from the date you leave the Plan to complete that purchase.

Prior Service Purchases

If you intend to buy prior service, you must submit your application before you leave the Plan. If you are already making prior service payments, you will have 90 days* to complete your buyback purchase.

In either scenario, if you do not complete the purchase it will be prorated—only the amount of service you have paid for will be credited.

Combined Pensionable Service (CPS) can impact buybacks in these situations as well.

*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 buyback will be prorated and your service will be adjusted accordingly.