What types of service you can buy
Learn about the types of service you can buy to potentially increase your future pension.
Buying service for a period of reduced pay
If you worked for less than your full assignment
for a period of time, you may be able to buy the difference in pensionable service between your full assignment and the reduced amount you actually worked.
The advantage of buying service for a period of reduced pay is that it increases your pensionable service, which in turn increases the pension you receive when you retire.
Situations in which you might consider this option
Here’s an example of a situation in which someone might consider this option: Dan has worked full time for the City of Vancouver for the past 10 years. This year, he and his partner adopted a child, and Dan wants to reduce his hours at work so he can spend time bonding with his new daughter. With his employer’s permission, he reduces his workload to 50 per cent of full time for the next six months. During this time, Dan only earns half his normal salary, which means he makes half his normal pension contributions and earns half his normal pensionable service. At the end of this six-month period of reduced pay, Dan will be eligible to top up his service by buying back the difference between his normal assignment (full time) and the hours he actually worked (50 per cent of full time).
If you share a full-time position with a co-worker, you may both also top up to your usual full assignment. For example, Muhammad and Brenda have worked for the City of Kelowna for the past 7 years. They equally share one full-time equivalent (FTE) job by each regularly working 50 per cent FTE. Muhammad wants to reduce his workload to 30 per cent FTE for a period of 3 months, and can later purchase up to his normal 50 per cent FTE. If Brenda also goes on a period of reduced pay (i.e., works less than 50 per cent FTE) and then later applies to top up her individual service, she can purchase up to her normal 50 per cent FTE.
Contact your employer if you have another situation you think might qualify, and you are interested in buying service for a period of reduced pay.
Rules around buying service for periods of reduced pay
Federal income tax regulations determine the rules around buying service for periods of reduced pay. These rules include:
- You may only purchase periods of reduced pay that occur after you have been working for your employer for at least three years
- If you normally work less than 100 per cent full time, you can only buy enough service to bring you up to the amount of your normal full assignment
- To buy service for a period of reduced pay, you must:
- have worked at your full assignment at some point before the period of reduced pay
- continue working for the employer during the period of reduced pay
Contact your employer if you meet these requirements and are interested in buying service for a period of reduced pay.