Overview: What Is a Service Buyback?

(Background music: Welcome page with a logo of the Government of Canada Pension Centre.)

At the Government of Canada Pension Centre, we're here to help.

Hi, my name is Andrea.

Would you like to increase your pension? Who wouldn't, right? So let's talk about buying back past service under the public service pension plan. A buyback is the purchase of eligible past service to count towards your pension.

Here are the many advantages of buying your past service:

• It increases your pensionable service and your pension.
• It increases the pension benefits for your survivors.
• It allows you to reach your maximum 35 years of pensionable service earlier.
• It could also allow you to retire sooner.

(The narrator is sitting down on the white sofa. When she says: “…advantages of buying your past service,” a grey text box appears in the top-right corner of the screen with the words “INCREASE SERVICE AND PENSION, INCREASE SURVIVOR BENEFITS, REACH 35 YEARS EARLIER, RETIRE SOONER” in white letters. The text box disappears.)

Here are the different types of past service that you may want to buyback:

• Federal Public Service: This is service with federal departments or crown corporations.
• Transfer value service: This is service in the Federal Public Service, The Canadian Forces, or the Royal Canadian Mounted Police. This applies to you if you received a lump sum amount called a transfer value or a commuted value payment when you cease this employment. You have one opportunity to buyback this service and you must do it within one year of receiving your notification of plan membership. Again, this is a one-time thing. You will not have another opportunity to buyback that service.
• Canadian Armed Forces or Royal Canadian Mounted Police Service: This is a service for which you would have received a return of contributions or periods of full-time service of six months or more.

  Do you have pensionable service with the Canadian Armed Forces or Royal Canadian Mounted Police? Ask us how you can transfer it to the public service pension plan.

• Pensionable employment: This is a service outside the Federal Public Service, such as employment with provincial governments, universities, private companies, and financial institutions, just to name a few.

  To be eligible to buy back your pensionable employment, you must have been a participant in your former employer's registered pension plan, and you must have left your employment no more than two years prior to joining the Federal Public Service.

(The narrator is facing the camera which is in a different angle. She is sitting on the white sofa. When she says: “Federal Public Service,” she moves her arm and taps her hand in the top-right side of the screen, then a text box appears with the words “PUBLIC SERVICE, FEDERAL DEPARTMENT, FEDERAL CROWN CORPORATION” in white letters. The text box disappears. When the narrator says: “Transfer Value Service,” she taps her hand in the top right of the screen and a text box appears with the words “TRANSFER VALUE SERVICE, FEDERAL PUBLIC SERVICE, CANADIAN ARMED FORCES, ROYAL CANADIAN MOUNTED POLICE.” When the narrator says: “You have one opportunity …,” the above words disappears and are replaced by the words “TRANSFER VALUE SERVICE, ONE-TIME OPPORTUNITY TO BUY BACK.” The text box disappears. When she says: “Canadian Armed Forces …,” she taps the top right of the screen and a text box appears with the words “CANADIAN ARMED FORCES OR ROYAL CANADIAN MOUNTED POLICE, RETURN OF CONTRIBUTIONS RECEIVED, FULL-TIME SERVICE OF 6 MONTHS OF MORE.” The text box disappears. When she says: “Pensionable Employment,” she taps in the top-right-hand side of the screen and a text box appears with the words “PENSIONABLE EMPLOYMENT, PROVINCIAL GOVERNMENTS, UNIVERSITIES, PRIVATE COMPANIES, FINANCIAL INSTITUTIONS.” When the narrator says: “To be eligible …,” the above words disappear and are replaced by the words “ELIGIBILITY, PARTICIPANT IN FORMER PENSION PLAN, WITHIN 2 YEARS OF JOINING PUBLIC SERVICE.” The text box disappears.)

Now, you know what type of service you can buyback.

Let's see what other information you will need before going forward.

The cost of your service buyback is based on your salary, your rate of contributions, your age, and the date you mailed your buyback form.

For more information on the cost of buying back service and the methods of payment, please see the video that we prepared for you on this topic.

(The narrator and camera angle changes. She is sitting on the sofa. When she says: “The cost of your service …,” a text box appears in the top right of the screen with the words “SALARY, RATE OF CONTRIBUTIONS, AGE, DATE OF BUYBACK.” The text box disappears.)

In most cases, you will need to undergo a medical examination.

Please note that this examination is at your own expense.

You must do this no more than six months before or one year after the date you mail your buyback form.

There are tax implications when you buyback service.

Pension contributions are tax deductible with certain limitations.

As well, a service buyback may only be valid if you have enough registered retirement savings plan or RRSP room.

We also prepared a separate video to provide you with more information on the subject.

(The narrator and camera angle changes. We see a close-up of her face, and she is sitting on a sofa. When the narrator says: “… medical examination …,” a text box appears in the top right of the screen with the words “MEDICAL EXAMINATION.” The text box disappears. When she says: “… enough registered retirement …,” a text box appears in the top right of the screen with the words “RRSP CONTRIBUTION ROOM.” The text box disappears.)

You can accumulate a maximum of 35 years of pensionable service under the public service pension plan.

This includes various types of service, like service you have bought back.

Please note that a year of part-time service counts as a one year of service towards your pension.

Your combined part time and full-time service cannot exceed 35 years.

If you have part-time pensionable service, we adjust your pension to reflect these hours of service.

(The narrator and camera change to a previous angle. The narrator is sitting on the sofa. When she says: “… accumulate a maximum …,” a text box appears in the top right of the screen with the words “35 years.” The text box disappears. When she says: “Please note that a year …,” a text box appears in the top-right-hand side of the screen with the words “1 PART-TIME YEAR = 1 YEAR OF SERVICE.” The text box disappears. When the narrator says: “… part-time pensionable service …,” a text box appears in the top right of the screen with the words “PENSION IS ADJUSTED FOR PART-TIME SERVICE.” The text box disappears.)

To start the service buyback process, you must complete and mail the service buyback form.

PWGSC-TPSGC 3006.

This must be done while you are employed and an active plan member of the public service pension plan.

You cannot cancel a valid service buyback under the public service pension plan.

So we suggest that you contact the Pension Centre before you sign your service buyback form.

We can help you determine if you have any service that you can buyback.

We will also provide you with a service buyback package that includes a cost estimate and the forms you will need.

(The narrator and camera angle change. The narrator is sitting on the sofa. When she says: “… service buyback form …,” a text box appears in the top right of the screen with the words “SERVICE BUYBACK FORM PWGSC-TPSGC 3006.” The box disappears. When the narrator says: “You cannot cancel …,” a text box appears in the top right of the screen with the words “A VALID SERVICE BUYBACK CANNOT BE CANCELLED.” The box disappears.)

I hope this was helpful to you.

Should you have any questions regarding service buybacks, feel free to contact us.

You can also access more information by visiting canada.ca/pension-benefits.

(The camera angle changes and the narrator stands up while looking into the camera. When the narrator says “… feel free to contact us or visit …,” the words CANADA.CA/PENSION-BENEFITS appear on the bottom of the screen.)

Thanks for watching.

(Text on screen: Contact information: Government of Canada Pension Centre – Mail Facility, PO BOX 8000, Matane QC G4W 4T6. Telephone: 1-800‑561‑7930. Email: pwgsc.pensioncentre-centredespensionstpsgc@pwgsc-tpsgc.gc.ca)

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