Tax information for active members
Learn about your pension and income taxes, including what you need to know about pension adjustment amounts and your RRSP contribution limit.
How buying service might change your RRSP contribution room
You can buy service using a combination of cash and an RRSP transfer. However, if you are transferring service from the pension plan of a previous employer or buying past service and the past service pension adjustment is greater than your available RRSP contribution room, you may have to make a qualifying withdrawal from your RRSP.
The CRA will contact you in writing if you must make a qualifying withdrawal to transfer or buy past service. If you decide not to make a qualifying withdrawal, you must notify both the CRA and the pension plan.
In some situations, the CRA may allow you to over-contribute to your RRSP. If you are considering buying past service and do not have enough RRSP room available to do so, contact the CRA to find out if you are eligible.
If your past service pension adjustment is not approved by the CRA, and you are not able to make a qualifying withdrawal, you cannot buy the past service.