How to transfer service between public sector plans
You may be able to transfer your eligible service if you are joining or leaving the plan.
If you leave your job, you may be able to transfer your service from your original pension plan to your new employer’s pension plan. You can do this if the two pension plans have an agreement to do so.
Things to think about when transferring service
The benefit of transferring service is that it may allow you to:
- Increase your pensionable service and the value of your pension
- Increase your contributory service, which may allow you to retire earlier with an unreduced pension
However, it’s not always to your financial advantage to transfer service. It may be better to collect two separate pensions rather than transferring your service to collect a single pension. This could be the case if either:
- The total of the two separate pensions is more than a single pension after a transfer
- You can collect a pension earlier under your former plan
It is a good idea to talk with an independent financial adviser to help you decide if transferring service is a good choice for you.
Deciding not to transfer service
If you decide not to transfer your service between pension plans, when you retire you may receive a separate pension from each plan in which you accumulated pensionable service.
The pension you earn in any other plan will not affect the pension you earn with BC's Municipal Pension Plan.
Differences in pension service value between plans
The service you transfer from another plan may not have equal value in BC's Municipal Pension Plan and vice versa. There are a number of reasons for this, including different pension benefit formulas in each plan and salary differences between your old and new jobs. This means the service you are credited for when transferring service between plans may not equal the service you accumulated while you were working.
If the value of the service you transfer from your former plan is less than the cost to buy the same service in your new plan, there is a service shortfall.
If you are transferring service to the Municipal Pension Plan, you can pay for this service shortfall and be credited with full service. You must pay for a service shortfall in one lump sum and within a specific period.
If you decide to transfer your service but you do not want to pay for the service shortfall, you will be credited with pro-rated pensionable and contributory service based on the service that can be purchased with the amount actually transferred.
How transferring service affects your pension
If you transfer your service from your former pension plan to BC's Municipal Pension Plan, your eventual pension will be calculated using:
- The combined eligible service from all plans (this may be adjusted if there is a shortfall)
- Your five-year highest average salary (HAS) from the Municipal Pension Plan
- The retirement age specified by the Municipal Pension Plan
What is the process?
If you're leaving BC's Municipal Pension Plan and would like to transfer your service to another plan that has an agreement with us, please contact the new plan.
If you’re joining BC's Municipal Pension Plan and would like to transfer your service from your old pension plan, submit the Pension transfer application form. We’ll then tell you if you are eligible and how much service we will recognize from your former plan.
There are deadlines to do this, so contact us as soon as possible so we can confirm your eligibility.
If you have a former spouse with an entitlement to your pension, the pension will need to be divided before the transfer. Contact the plan.
There may be tax implications associated with transferring service. We suggest you talk with an independent financial adviser before making your final decision to transfer eligible service between plans.