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.
You may be able to increase your pension by buying service for periods when you were not contributing to BC's College Pension Plan.
When you buy service, you increase the amount of pensionable service that counts toward your pension. This may increase the pension you receive when you retire or allow you to retire earlier.For example, if you work full time and decide to take a year of unpaid leave, you will have one less year of pensionable and contributory service. If you decide to buy this service, your pensionable service will increase, which may increase your pension when you retire. Buying this service would also add one year to your total contributory service. We use your contributory service to determine if you are eligible for an unreduced pension.
There are several ways to buy service and increase your pension:
- Buying service for an approved leave of absence, such as a maternity, parental, adoption, compassionate care or general leave
- Buying arrears for a period when you were eligible to make pension contributions but your employer didn't deduct them
A note about long-term disability
If your long-term disability benefits are provided by:
- A group disability plan approved for pension purposes, you will continue to accumulate pensionable and contributory service while you are away from work. In this case, you do not need to buy back service.
- A group disability plan not approved for pension purposes, you may be able to buy back service when you return to work.
What service cannot be bought?
You cannot buy all types of service. For example, you cannot buy:
- More service than you would normally have received while working (e.g., if you are a part-time employee, you cannot buy service equivalent to full time)
- Service that would put you over the income tax limits for pension and RRSP contributions
- Service that would put you over the income tax leave limits (e.g., you cannot purchase service for more than five years of general leave over the course of your working life)
- Service for a leave of absence that ended more than five years ago
- Any non-contributory period of service
How much will it cost?
The cost of buying most service types is based on:
- The number of months of service you want to buy
- Your current gross monthly salary (calculated as full-time equivalent)
- The current employee and employer contribution rates
Sign in to My Account and use the personalized purchase cost estimator to find out how much your purchase of service may cost. You can also fill out a Purchase of service application form and submit it to your employer. Once they verify the information, provide other details and send it to us, we will send you a statement showing your cost.
How much will it increase your pension?
Sign in to My Account and use the personalized purchase cost estimator to see how buying service may increase your monthly pension.
Is there a deadline for buying service?
There is a five-year deadline for buying all service types:
- You must apply to buy the service within five years of the end of the leave period, while you are still working for the same employer
- If you leave your job with that employer before the five-year deadline has passed, you must apply to purchase service within 30 days of ending your employment
Since the cost is based on your salary and the contribution rates when you apply, you may wish to buy service as soon as possible rather than waiting until the deadline.
What is the process?
Start by getting an estimate of the cost of buying service. Sign in to My Account and use the personalized purchase cost estimator to see how much it might cost and how buying service might affect your pension.
For some situations, the personalized purchase cost estimator will not work and your employer will need to submit a Purchase of service application form on your behalf. This could apply, for example, if you have a former spouse who is entitled to a portion of your pension, or if you are on long-term disability under an unapproved group disability plan.
If you decide to buy service, you must complete the Purchase of service application form and submit it to your employer. Your employer will verify the information on your application, provide other details and send the application to us.
We'll send you a statement that shows the cost of buying service and the payment deadline.
Once you buy service, we will add it to your record.
Are there tax considerations?
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.
What if you take your money out of the plan?
If you leave your job with an employer participating in the plan, you can keep your contributions in the plan until you apply for your pension. If you decide to withdraw your contributions and are applying to buy service, you must wait until the process of buying service is finalized before we can process your withdrawal or transfer request.