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Description of the Different Types of Prior Service
Prior Federal Public Service
You may buy back virtually any type of prior federal public service. This includes periods of part time service after 1980 for which the assigned workweek averaged at least 12 hours. It also includes periods of leave without pay, which you previously chose not to count.
The cost of buying back periods of leave without pay that you chose not to count on return to work will be based on your salary at the time you make your election to buy back service. This service will be costed at a single or double rate of contributions depending on the type of leave. Interest will be added in the same manner as it is for other prior service; that is, four per cent simple interest from the date of the service to the month in which you submit the Service Buyback Form.
If you received a transfer value in respect of a previous period of employment, you may, in some circumstances, buy it back. It is important to note that there is a limited period of time within which you must buyback this service. The cost and method of payment is different for reinstatement of transfer value service. Please contact the Public Service Pension Centre (Pension Centre) for a cost estimate for this type of service.
Service with the Canadian Forces or the Royal Canadian Mounted Police (RCMP)
You may buy back different types of service depending on your pension benefit entitlement status under one of the following pension plans: the Canadian Forces pension plan, or the RCMP pension plan.
The cost to count the service depends on when you buy back and the category that describes your service:
- Prior non-contributory service
- Contributory service for which you received or are entitled to receive a return of contributions
- Contributory service for which you are in receipt of or are entitled to a pension benefit.
If you are in receipt of a pension under one of these plans, you may surrender your pension entitlement in order to combine all your pensionable service under the public service pension plan. In that case, all pension benefits received from your former plan, after your first year as a plan member under the public service pension plan, must be repaid to them. You must also continue to pay any amount you still owe under the former plan.
Once a plan member chooses to buy back service under this section, he surrenders his right to any pension benefit entitlement under the Canadian Forces or the RCMP pension plan in respect of that service. Prior to signing the Election to Surrender Benefits form, you may wish to obtain an estimate of the increase to your pension as a result of counting the service under the public service pension plan. Only the Specialized Services Division of either the Canadian Forces or RCMP can advise you of the monthly cost to repay your pension and any other amount you owe to those plan administrations. You may contact them at the address found in Part B of the Election to Surrender Benefits form.
Election to Surrender Benefits - PWGSC-TPSGC 2092
Service as a Member of Parliament
You may buy back your prior service by surrendering your pension entitlement under the Members of Parliament pension plan. The cost of counting this prior service depends on whether you became entitled to a pension or a withdrawal (lump-sum payment) on ceasing to be a member under that plan.
If you are entitled to a pension, you must surrender it and repay, with interest at four per cent per annum, any pension you received after your first year as a public service pension plan member. You must also pay any contributions still owing under the Members of Parliament pension plan and pass a Medical Examination.
If you received a lump-sum payment under the Members of Parliament pension plan, you will contribute based on your salary when you most recently became a public service pension plan member. In this case, you must buy back your service within one year of becoming a public service pension plan member. Interest is added from the time the service occurred until the date you make your election to count the service under the public service pension plan.
As the benefit formula under the Members of Parliament pension plan is significantly different from that of the public service pension plan, you should obtain an estimate of your pension benefits payable as well as the cost to count this service under the public service pension plan before surrendering your benefit entitlement. For an estimate, please contact the Pension and Benefits Sector of the Treasury Board Secretariat.
Pensionable Employment Outside of the Public Service
Pensionable employment is any employment outside the federal public service with an established pension plan, which has been approved for public service pension plan purposes. You must have been a member of the former pension plan.
The public service pension plan only permits the counting of a period of pensionable employment if it accrued under a pension plan which was registered under the Income Tax Act. Please note that service accrued under a Deferred Profit Sharing Plan or Group Registered Retirement Savings Plan cannot be bought back as pensionable employment under the public service pension plan.
Your pensionable employment must have occurred immediately before you joined the federal public service. When the interval between terminating pensionable employment and joining the federal public service is more than 6 months but less than two years, the Pension Centre will determine whether the service is "immediately prior". If the interval between terminating pensionable employment and joining the federal public service is more than 2 years, the service cannot be purchased.
You must also surrender any pension benefit entitlement under your former plan in order to count this service under the public service pension plan. The outside employer will have to agree to the surrender.
You should also remember that, if you leave the federal public service voluntarily with less than two years of continuous employment, you are only entitled to a return of your contributions paid into the public service pension plan.
Consequently, if you intend to leave within that period, you should consider whether it is in your interest to surrender the entitlement under the outside plan. This provision does not apply if your termination from the federal public service is involuntary.
Before making a decision concerning the value of surrendering a pension entitlement with your former employer, please carefully evaluate the potential benefits payable under your former plan against the additional benefit payable under the public service pension plan. To obtain benefit estimates under the public service pension plan, you can access the Web Compensation Web Applications (CWA) - Pension Calculator. In addition, we strongly recommend that you consult with a financial advisor at your own expense, to assist you in evaluating your options under both plans.
Before surrendering an annuity entitlement with an outside employer, it is very important that you understand the various payment options and financial implications specific to this type of buyback. Please contact the Pension Centre prior to completing your Service Buyback Form.
If you decide to surrender and buy back your outside employment, you must complete and forward the following form to your former employer.
Pensionable Employment Questionnaire PWGSC-TPSGC 2069 (PDF 613 KB, Help for PDF file)
When the Pension Centre receives your completed Service Buyback Form PWGSC-TPSGC 3006 (PDF 312 Ko, Help for PDF file), they will contact you with details concerning the surrender.
For information on the cost of prior service, please refer to Costing.
Pension Transfer Agreements
Pension Transfer Agreements (PTA) provide another way of counting your prior pensionable service with an outside employer under the public service pension plan.
If you leave outside employment to become employed in the federal public service and a PTA has been negotiated between the two employers, you may be eligible to transfer all or part of your accrued pension credits to the public service pension plan. Please note that the acquired pension credits under the public service pension plan as a result of the transfer may not be equivalent to the exporting employer's pension credits. For example, this may occur when the benefit formula under your previous employer's pension plan was lower than the one under the public service pension plan.
For more information about a PTA, please contact the Pension Centre. You may also refer to the Pension Portability Package.
Other Types of Prior Service
You may be able to buy back other types of prior service. You should consult the Pension Centre if you have any questions about whether you can buy back a specific period of prior service.