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.
When you buy service, you increase the amount of pensionable service that counts towards your pension. This may increase the amount of your monthly pension payment when you retire.
For example, if you work full time and decide to take a year of unpaid leave, you will have one less year of pensionable service. If you decide to buy this service, your pensionable service will increase, which may also increase your pension when you retire. Buying this service would also add one year to your total contributory service. Your contributory service is used to determine if you are eligible for an unreduced pension.
There are situations where you may be able to increase your pension. These include:
- Buying service for an approved leave of absence, such as a maternity, parental or general leave
- Buying non-contributory service for a period when you worked for an employer participating in the Municipal Pension Plan but were not making pension contributions, such as during a probationary period
- Buying past service if you worked for your employer before it joined the Municipal Pension Plan
- Buying arrears for a period when you were eligible to contribute to the plan but did not
A note about disability leave
You do not need to buy service if you are on an approved group disability plan leave. When you are on a long-term disability leave, you continue to accumulate pensionable and contributory service.
Not all service can be bought
Not all service is available to buy. For example:
- You cannot buy more service than you would have normally worked. So, you cannot be a part-time employee and buy service equivalent to that of a full-time employee.
- You cannot buy service that would cause you to go over the income tax limits for pension and RRSP contributions.
The cost to buy most service types is based on:
- The number of months of service you want to buy
- Your current full-time salary
- 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.
How it might 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.
There is a five-year deadline for buying all service types. The type of service dictates when the five-year period begins.
If you leave your employer, you must apply to buy the service within 30 days.
Since the cost is based on your salary and the contribution rates when you apply, it is a good idea to buy service as soon as possible rather than waiting until the deadline.
Start by getting an estimate to buy service. Sign in to My Account and use the personalized purchase cost estimator to see what it might cost and the impact that buying service may have on your pension. For some service types, you need to complete the Purchase of service application to get an estimate. The estimator will create a Purchase of service application for you if you wish to apply.
If you decide to buy service, complete the application and submit it to your employer. Your employer will verify the leave and provide other details and send it to us. We’ll forward you the cost and the payment deadlines.
Once you have paid the cost to buy service, we will add the service to your record.
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.
Taking your money out
If your job ends with your an employer that participates in the plan, you may decide to:
- Withdraw your pension contributions from the plan entirely and transfer them to a locked-in retirement vehicle
- Transfer your pension contributions to a new employer with a different pension plan, if a reciprocal transfer agreement exists between the Municipal Pension Plan and your new pension plan
In these cases, you must wait until the process of buying service is completed before we are able to process your withdrawal or transfer request.