Taking a leave of absence—Reservists in the Reserve Force Pension Plan
During the course of your career as a Reservist with the Canadian Armed Forces (CAF), you may decide to take an unpaid leave of absence for maternity or parental reasons.
You may want to know
How does service without pay for maternity or parental reasons work for pension purposes?
All service that you accrue as a participant in the Reserve Force Pension Plan counts as pensionable service. Pensionable service is used to determine what pension benefit you receive at release (unreduced pension, reduced pension, deferred pension, etc.) and how much your pension is reduced if you choose to receive a reduced pension. However, if you chose not to pay contributions for service without pay for maternity or parental reasons, this period will not count as pensionable service.
Canadian Force service
Service without pay for maternity and parental reasons, whether or not you contributed, counts as CF service. CF service for these periods is calculated based on the ratio of your paid service to your unpaid service in the 12 months leading up to the commencement of your service without pay for maternity or parental reasons. No other type of Reserve Force service without pay is considered CF service.
Do I contribute to the pension plan during my service without pay for maternity or parental reasons?
No. You are not required to contribute to the pension plan while you are on a period of service without pay for maternity and parental reasons. However, as this period of service is considered pensionable, when you return to work the contributions owing for that service will be withheld from your pay in an amount equal to half of the contributions that you make on your earnings until the amount owing is paid in full.
Can I choose not to contribute to the pension plan for my service without pay for maternity or parental reasons?
Yes. Contact the Government of Canada Pension Centre if you do not want to pay pension contributions for that period. Otherwise, pension contributions will automatically be deducted when you again have Reserve Force earnings. You must contact the Government of Canada Pension Centre before your contributions for the service without pay have been paid in full in order to exercise your option not to contribute for your service without pay and to receive a refund of any contributions that you have paid for that service.
If you do not want to pay pension contributions for your service without pay, you must complete the Election not to Count Leave without Pay as Pensionable Service (CF-FC 2480) form.
If I choose not to contribute to the pension plan for my service without pay for maternity or parental reasons, can I later buy it back?
Are there limits on how much service without pay for maternity or parental reasons may be counted for pension purposes?
Yes. The Income Tax Act places restrictions on the total amount of service without pay for maternity or parental reasons that can be treated as pensionable during an individual's career and the maximum permitted is 3 years.
What are my payment options for pensionable service without pay contributions?
When you return to work, your pension contributions will be withheld from your pay in an amount equal to half of the contributions that you make on your earnings until the amount owing is paid in full. However, if you would like to pay the full amount owing in the form of a lump sum payment, you can avoid having the contributions withheld from your pay as long as you do so within 30 days of your return to work. Otherwise, you have the option of making a lump sum payment towards the balance owing at any time before it is paid in full. Lump sum payments can be made by:
- personal cheque, postal or bank money order payable to the Receiver General for Canada. Send your payment, together with a Payment Transmittal Form (CF-FC 570)
When sending a lump sum payment you must provide details on the payment by stating if it is for pension contributions or a service buyback payment.
The receipt issued from the Government of Canada Pension Centre will be your tax receipt. Include it with your tax return to claim the deduction of pension contributions to a registered pension plan.
- by direct transfer of funds from your Registered Retirement Savings Plan (RRSP) to the Regular Force Pension Plan; using the Canada Revenue Agency Direct Transfer (T2033) form. Send your completed T2033, together with a Payment Transmittal Form (CF-FC 570), to the address indicated on the transmittal form
What documents do I need to send in to the Government of Canada Pension Centre for my service without pay?
A copy of your child's Birth/Baptismal Certificate or Adoption Certificate should be provided to the Government of Canada Pension Centre for the following types of service without pay:
- Maternity leave
- Parental leave
Contact the Government of Canada Pension Centre if you have any questions regarding the required documents.
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