How to buy past service
Find out how to buy past service to potentially increase your future pension.
If you worked for your employer before the employer joined BC's Municipal Pension Plan, you may be able to increase your future pension by buying past service.
Buying past service increases the service that counts toward your pension. This may increase the monthly pension payment amount you would receive when you retire.
Are you eligible?
You may be eligible to buy your past service as long as you have not waived your enrolment in the plan. If you signed a waiver choosing not to join the plan, either on or after April 1, 2000, you cannot buy past service.
Here's an example:
- Member started working for an employer not participating in the Municipal Pension Plan: August 15, 1998
- Employer joined the plan: April 1, 2010
- Member became eligible to join the plan, but waived their enrolment: April 1, 2010
- Member now chooses to join the plan: October 1, 2010
This member is not eligible to buy their past service from August 15, 1998 to March 31, 2010 (before the employer joined the plan) or their non-contributory service from April 1, 2010 to September 30, 2010 (after the employer joined the plan) because they chose not to enrol in the plan after April 1, 2000.
How much will it cost?
The cost to buy past service depends on:
- Your age
- Your current full-time equivalent salary
- The actuarial value of the increase in your pension benefit
The cost to buy past service cannot be estimated using the tools in My Account. You need to complete and send us a Purchase of service application and we will calculate the cost.
What is the deadline?
You must, whichever comes first, apply either:
- Within five years from when you first contributed to the plan
- Within 30 days of when your job ends with the employer with whom the service occurred
What is the process?
- Open and save the Purchase of service application form online
- Complete Part A of the form online
- Check the box for Type of Purchase as Non-contributory service, and note that you want to buy past service
- Print and sign the form
- Attach any required documents to the form
- Send the completed form and documents to your current employer to complete and send Part B to the Municipal Pension Plan
- We will send you an estimate of the cost and its impact on how it affects your pension
- If you decide to buy the past service, contact us to send you a final cost for buying a portion or all of the past service
If your employment records are missing, inaccessible or incomplete, you and your employer can agree to a default pensionable service option. With this option, your employer will certify 50 per cent pensionable service and 100 per cent contributory service on the Purchase of service application form for the period of eligible time you want to buy.
Talk to your employer for more information about the default option.
What are the payment options?
You must pay the full amount by the due date shown on the statement of cost. You can pay by:
- Online banking from your personal bank account
- Cheque, money order or bank draft (payable to Municipal Pension Plan)
- Transfer from an existing RRSP or locked-in retirement vehicle in your name
- A combination of the above options
You will only receive a tax receipt if you pay by online banking, cheque, money order or bank draft.
You are responsible for ensuring the correct payment amount reaches the plan by the due date indicated on the statement. If you miss the payment deadline, you must continue to meet eligibility requirements, including the original five-year time limit, and reapply to make the purchase.
How to pay from an existing RRSP or locked-in retirement vehicle
If you wish to pay by transferring funds from an RRSP or locked-in retirement vehicle, your financial institution must make this transfer to the plan on your behalf. You should instruct your financial institution to send the exact amount owed to the plan by the due date. Ensure that your financial institution does not deduct service fees from your purchase of service payment, as this will result in an incomplete payment.
How to pay through online banking
The following financial institutions are set up for online banking with BC Pension Corporation:
To pay an invoice online:
- Sign in to your financial institution's online banking service.
- Under Add a payee, select BC Pension Corporation.
- For your account number, type in your Person ID (PID) number. (You can find your Person ID number on your purchase invoice or statement of cost.)
If you need help making your payment through online banking, contact your financial institution.