Leaves of Absence

Important notice: Please note that the rules for outstanding buybacks at the time of pension commencement are changing. The new rule states that if a member has an outstanding buyback payment and would like to start receiving their pension, the buyback must be paid for in its entirety prior to the member’s pension commencement date. This means that no further payments will be accepted after a member’s pension commencement date.

Pensionable service is one key factor in determining how much of a pension you will receive upon retirement. You have the option of buying service from times while you were away from work and not being paid, such as maternity or parental leave. This buyback option lets you reduce or close that gap in your pensionable service, and increases the amount of your future pension.

You have the option to make the payments during your leave or wait until you return to work. You are also allowed to use funds from a Registered Retirement Savings Plan (RRSP) or other retirement savings tools to pay for your buyback.

You can purchase up to three years of maternity or parental leave, and up to a maximum of five years of any other kind of leave. Additional years of maternity or parental leave can be applied to this five year limit.

For the first year of leave that you buy in PSPP, your employer pays the employer share of contributions with interest while you pay the employee share. Only the first year of leave in PSPP is cost-shared this way. For any additional leaves, you are responsible for paying both the member and employer share.

Buying Back Service from a Leave

If you are considering buying back service from a leave, the best place to start with is your employer's Human Resources or Payroll & Benefits area. If your employer tells us that you have a leave of absence that can be purchased, you will be sent a Buyback Proposal early in the year. This Buyback Proposal will tell you what you need to know about purchasing the gap in your service.

To purchase your leave of absence, your employer must let us know by the earlier of:

90 days from the date you are sent your Buyback Proposal; or
April 30th of the year following the year in which your leave ended.

You can also talk with your employer about prepaying for your leave, or making payments while you are away.

The due dates shown on your Buyback Proposal will be set based on these timelines.

If you miss these timelines, you can still purchase the leave, but it will cost you more. This is because the costing will no longer be based on contributions with interest and will no longer be cost-shared with your employer.

How Can I Pay For My Buyback?

There are several payment options to suit members’ needs.

Payment(s) must be made according to the schedule shown on your Buyback Proposal; however, if you prefer to avoid paying interest, you can pay for the entire buyback in one payment. You can also transfer funds from an RRSP or Locked-In Retirement Account (LIRA) by using Canada Revenue Agency's T2033 form.

You can even take a break from making payments should you go on another period of leave.

Paying for Buybacks

Can I Pay for Less Than the Whole Amount?

If you have a set amount you wish to pay towards your buyback, or should your financial situation change before you are finished paying the full amount, only the service you paid for will be credited to you.

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.

Time-Sensitive Considerations

If you are already making payments towards your leave of absence when you leave the Plan, you will have 90 days to finish paying for your buyback.

If you do not complete the payment, the amount of service attached to that leave of absence will be prorated and credited based on what you have paid for to-date.

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 Leaves Affect Combined Pensionable Service (CPS)

If a CPS relationship is established when you move between PSPP and MEPP or UAPP (or vice versa), you will not be considered terminated under the first plan until you terminate from the second plan. Therefore, this movement between plans will not impact the timelines applicable to applying or electing to purchase a leave of absence or period of prior service.

If you were making payments towards a buyback under PSPP immediately before moving to MEPP or UAPP (or vice versa), you may continue to do so after moving to the second plan. An employer is responsible for making the employer-share of contributions towards the first year of leave of absence you purchase under each plan. This applies even where a CPS relationship has been established.