Increasing your public service pension
Increasing your pensionable service may be advantageous in many ways. By increasing your pensionable service, you can increase your pension, increase protection for your beneficiaries and reach a maximum of 35 years pensionable service earlier, possibly enabling you to retire sooner.
You can increase your pensionable service by different means while you are employed and a public service pension plan member; either by making a service buyback, by reinstating transfer value service or by requesting a pension transfer agreement.
You may want to know…
What is a “service buyback” (also known as elective service)?
A service buyback is a legally binding agreement to purchase a period of prior service to increase your pensionable service under the public service pension plan. Additional information can be found in Increasing Your Pension.
What is a “transfer value reinstatement”?
A transfer value reinstatement is a special service buyback to reinstate the pensionable service for which you received a transfer value benefit under the Public Service Superannuation Act (PSSA). A transfer value benefit is a lump sum pension amount representing the present value of a plan member's accrued pension entitlement that is payable in the future.
Note: The option to buy back your prior transfer value service is available on a one-time basis only and within one year from the date the Notification of Plan Membership (PWGSC-TPSGC 2018) was issued.
What is a “pension transfer agreement”?
A Pension Transfer Agreement is an agreement used to transfer the actuarial value of your accrued pension benefit from one pension plan to another.
Would previous federal public service employment count as pensionable service under the public service pension plan?
There are several types of prior service that you may be able to buy back:
- Prior federal public sector service
- Service with the Canadian Forces
- Service with the Royal Canadian Mounted Police
Would employment outside the federal public service count as pensionable service under the public service pension plan?
If you were a member of a pension plan with your former employer, there are two options to increase your pension:
- Buy back eligible prior service through a service buyback.
- Transfer pensionable service from your former pension plan to the public service pension plan using a Pension Transfer Agreement. Your former employer must have a Pension Transfer Agreement with the Government of Canada. If not, your former employer may be able to negotiate one.
Note: You must decide to use these options within a certain time limit, once you become a member of the public service pension plan.
How much will it cost to buy back your prior service and for how long will you have to make payments?
The cost of buying back service is affected by the public service pension plan contribution rates as well as your salary and your age, when you sign a buyback form. You can estimate the cost of buying back service using the Compensation Web Applications (CWA) - Service Buyback Estimator. More details are available in the Service Buyback Package.
What are your payment options for a service buyback?
If you choose to buy back previous service, you have three payment options. You can pay by monthly deductions from your salary, lump sum payment(s), or a combination of these payment methods. Please note that you may make additional payments at any time. Refer to the Service Buyback Package and the Increasing Your Pension section for additional information on payments.
What is the difference between making monthly payments and paying in a lump sum for a service buyback?
Monthly deductions are more costly than a lump sum payment because the monthly deductions are life-insured and consist of principal, interest and life insurance amounts. When monthly installments are life-insured, neither your estate nor your survivors are required to make any payments that would be owed after your death. Any payments owed upon your death or that are not life-insured will be collected.
How do you make a service buyback?
The instructions for making a service buyback are contained in the Service Buyback Package, along with all required forms. A service buyback is a legal binding agreement and you should therefore review the information contained in the Package before you decide to purchase your prior service.
Visit Public service group insurance benefit plans for information on benefits.
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