Overview

This section provides a general introduction to buybacks and includes these topics:

Rules for buybacks

Buybacks or pension credit purchases are subject to certain rules. In general, the member must

  • have past service that is eligible
  • submit an application and supporting documents within a specific time period
  • pay for the purchase of pension credit within a specific time period, and
  • in some cases, receive approval from the Canada Revenue Agency (CRA) for the Past Service Pension Adjustment for post-1989 service.

Application and supporting documents

In all cases, the member must submit a completed Application to Purchase Pension Credit Form - OPB1043 (PDF) which

  • is included in the member's enrolment package, or
  • may be downloaded from OPB web-site by clicking on the above link.

The completed form must be mailed or faxed to OPB. OPB currently does not accept submissions of completed forms via email for privacy reasons.

The member may also need to provide other supporting documentation, based on the type of service requested for the buyback or purchase. The documentation allows OPB to confirm the eligibility requirements.

Important: OPB will not commence a review until it receives the completed application form and all required supporting documentation.

Buyback deadlines

OPB must receive the member's application within 24 months from the date the member

  • joins the PSPP, OPSEU Pension Trust, or
  • returns from an unpaid Leave of Absence.

Note: Transfers have different time limits than buybacks. These are addressed in Transfers.

Prior non-contributory OPS service

This section describes the purchase of pension credit for a period of employment with an OPS employer during which the member did not contribute to the PSPP or its predecessor plan. This may include periods of service when the member worked on a contract basis or where membership was optional.

It includes these topics:

Process for purchasing pension credit

This describes the process for buying back non-contributory OPS employment pension credit.
 

Stage Description
1 The member completes and submits to OPB the Application to Purchase Pension Credit Form - OPB1043 (PDF).
2 The member requests their OPS employer to submit a Service Report for Buyback transaction through OPB's employer portal.

Note: If the service was with a prior employer, the member is responsible for contacting that employer to request that a transaction be submitted.
3 The employer submits a Service Report for Buybacks transaction through the employer portal indicating the following:
  • period of the members' non-contributory employment
  • their corresponding earnings
  • actual time worked.
Note: The member can also provide the employer with a copy of their application to submit through the employer portal with the transaction.
4 The member receives the cost quotation from OPB and makes the following choices.
When members choose to... Then members...
decline the purchase notify OPB in writing that they do not want to make the purchase.

Note: If members do NOT respond within the time period, the option to purchase automatically lapses.
accept the entire purchase submit the appropriate payment.

Note: If members do NOT elect to purchase the entire period, the option to purchase the balance under this offer lapses.
accept the partial purchase of the service quoted

Deadlines for submitting application

The Application to Purchase Pension Credit Form OPB 1043 must be received by OPB within 24 months from the earlier of the date the member joined the PSPP or OPSEU Pension Trust (if the member joined the PSPP under a mandatory transfer from OPSEU).

Service Report for Buybacks transaction does not have to include an attached buyback application form (OPB 1043). However, OPB cannot process the buyback without the member's application. The member's salary rate at the date of OPB's receipt of complete documentation is used to calculate the buyback cost. Any delay in providing the required information may impact the buyback cost.

Important: If the member misses the 24-month deadline to submit the application, then the opportunity for purchasing credit lapses.

Prior contributory OPS service

This section describes the purchase of pension credit for a prior period of employment with an OPS employer during which

  • the member contributed to the PSPP or its predecessor plan or the OPSEU Pension Plan, and
  • at termination chose one of the following options:
    • refund of pension contributions plus interest (option exists only for terminations prior to July 1, 2012),
    • commuted value transferred to a locked-in RRSP or similar retirement vehicle, or
    • a deferred vested pension that remained with the PSPP or the OPSEU Pension Plan.

Note: Any pension benefits paid out to a former member according to the small pension rules from the PSPP is eligible service to buy back.

It includes these topics:

Process for buyback of prior contributory OPS pension credit

This describes the process for buying back OPS pension credit, including OPSEU credit, where the member received a refund or commuted value.

Stage Description
1 The member completes and submits to OPB an Application to Purchase Pension Credit Form - OPB1043 (PDF).

Note: For prior credit in OPSEU Pension Plan, the member provides OPB with:
  • membership data
  • credited service
  • entitlement data
2 OPB
  • receives the completed application,
  • confirms service and membership data,
  • calculates the cost quotation, and
  • provides the cost quotation to the member.
3 The member receives the cost quotation from OPB and makes the following choices.
When members choose to... Then members...
decline the purchase notify OPB in writing that they do not want to make the purchase.

Note: If members do NOT respond within the time period, the option to purchase automatically lapses.
accept the entire purchase submit the appropriate payment.
accept the partial purchase of the service quoted

Deadline for submitting application

The Application to Purchase Pension Credit Form OPB 1043 must be received by OPB within 24 months from the earlier of the date the member joined the PSPP or OPSEU Pension Trust (if the member joined the PSPP under a mandatory transfer from OPSEU).

Prior OPSEU membership data does not have to accompany the application. However, OPB cannot process the application without this information. The member's salary rate at the date of OPB's receipt of complete documentation is used to calculate the buyback cost. Any delay in providing the completed application and required information may impact the buyback cost.

Important: If the member misses the 24-month deadline to submit the application, then the opportunity for purchasing credit lapses.

Deferred Pension in the PSPP

When members elected to leave their pension with the PSPP or predecessor plan, the member should contact OPB directly about reinstating the member's prior service.

Deferred pension in OPSEU pension plan

Members who have a deferred pension with the OPSEU pension plan must submit an Application to Purchase Pension Credit Form - OPB1043 (PDF) within 24 months of joining the PSPP.

Important:Members will have to repay any excess contributions they received if they wish to obtain full credit for the deferred pension.

Leaves of absence without pay: more than one month

This section describes buyback of eligible pension credits for a leave of absence of more than one month with an OPS employer when the member had elected not to contribute during the leave. It includes these topics

Eligible leaves without pay

An employer may grant a member a leave of absence for a variety of reasons. The PSPP provides members with the option of purchasing pension credit for the following types of leaves only:

  • pregnancy, parental or adoption
  • family medical leave
  • illness
  • special or educational purposes.

Process for buyback of a leave of absence without pay

This table describes the process for buying back pension credit after a leave of absence without pay.

Stage Description
1 The member and the employer complete and forward the following forms to OPB, if these have not been prevously filed with OPB for the leave period in question: Note: If the leave period is purchased as a buyback, the leave should have been already reported to OPB.
2 OPB
  • receives the completed application, and
  • calculates the cost to purchase pension credit for the leave period, and
  • provides the cost quotation to the member.
Note: If it is a leave of absence with pay, the employer continues to deduct pension contributions. If it is a leave of absence without pay of 30 days or less, members are required to pay contributions for the leave period as arranged with the employer prior to the leave. OPB does not provide a cost quotation for a leave of absence of 30 days or less.
3 The member receives the cost quotation from OPB and makes the following choices.
When the member chooses to... Then the member...
Decline the purchase notifies OPB in writing that he/she does not want to make the purchase.

Note: If the member does NOT respond within the time period, the option to purchase automatically lapses.
Accept the entire purchase submits the appropriate payment or indicates that they want to pay through payroll deductions.
accept the partial purchase of the service quoted
4 Employer matches member contributions and remits them to OPB (for leaves other than the exceptions listed below) and/or sets up the applicable payroll deductions.
5 OPB calculates the buyback cost using the member's salary rate in effect on the date it receives the complete documentation.

Application deadline for leaves that last 31 days or more

The member must submit a completed Application to Purchase Pension Credit Form - OPB1043 (PDF) to OPB within 24 months from the last day of the leave during membership in the PSPP or OPSEU Pension Trust (if the member joined the PSPP under a mandatory transfer from OPSEU).

Important: Any delay in providing the completed forms and required information may impact the buyback cost since the member's salary rate at the date of OPB's receipt of complete documentation is used to calculate the buyback cost.

If the member misses the 24-month deadline to submit the application, then the buyback costing lapses and the member must re-apply.

OPB cost quotation

OPB's cost quotation is based on

Exceptions

This table describes the leaves that are costed differently.

When the... Then...
calculation is for a period of special/educational leave the member must pay twice the cost based on the member contribution rate and salary rate.
leave of absence is 31 or more calendar days the employer must remit both member and employer contributions for the period of the leave.

Note: Full payment is required upon return to work and must be made within a period of time that is not greater than the period of the Leave of Absence.

Maximum pension credit accrual while on leave

The combined pension credit obtained by a member of the Plan after 1990 while on a Leave of Absence must not exceed a total of 5 years.

Exceptions

The following are exceptions to the maximum credit accrual:

Pregnancy / Parental / Adoption Leave may include an additional 3 years provided each leave is limited to 12 months from the birth or adoption of a child.

Pension Credit purchased after 1991 for Special Leaves taken prior to 1992 cannot exceed 2 years.

Non-OPS under another registered pension plan

This section describes how to buy back past service when the member has

  • contributed to a pension plan that is registered in Canada, and
  • a termination benefit from the former employer that meets the criteria for a buyback.

This section includes these topics:

Non-OPS service qualification for Supplementary Pension

The PSPP does not provide a Supplementary Pension for service purchased from another registered pension plan.

Termination criteria

To be eligible for a buyback, the member's termination benefit from the former employer must meet the criteria described in this table.

When the pension credit is for a period... Then the member...
before 1992 must still have credited service or assets still held in the Registered Pension Plan established by the former employer (e.g., a deferred pension from that Plan).
After 1991 does not have to have credited service or assests still held in the Registered Pension Plan of the former employer. The member may have chosen any type of entitlement or option from the previous Plan (e.g., a refund or commuted value transfer to an RRSP/LIRA or a deferred pension).

Process

This describes the process for buying back prior non-OPS service from another registered pension plan.

Stage Description
1 The member completes an Application to Purchase Pension Credit Form - OPB1043 (PDF).
2 OPB sends a letter to the member outlining the data required from the former employer/previous plan.
3 The member requests a letter from the former employer/previous plan.
4 The former employer provides a letter to the member with the following required information:
  • name and address of former employer
  • name of the pension plan and its Canada Revenue Agency registration number
  • member's dates of plan membership (plan enrollment and termination)
  • total credited service
    • in total years, months, and days
    • broken down for the following service periods, if the member has service in these periods:
      • up to December 31, 1986
      • from January 1, 1987 to December 31, 1991
      • from January 1, 1992 and after
  • dates of non full-time employment (part-time employment, seasonal lay-off, any unpaid leave of absence)
  • pensionable earnings and pension adjustments for all service by calendar year for each year after December 31, 1989
  • confirmation of the amount, if any, of post-1989 contributions or benefits that were transferred to an RRSP
  • confirmation that locked-in amounts are subject to Ontario's locking-in rules.
Credited Service Accrued Prior to January 1, 1992

For any credited service accrued by the member before January 1, 1992, the former employer must provide confirmation that the funds are
  • still in the previous employer's pension plan, and
  • available for transfer from the previous employer's pension plan to the Public Service Pension Plan.
5 The member submits

OPB 1043, and the letter from the previous employer.
6 OPB calculates the buyback cost using the member's salary rate in effect on the date it receives the complete documentation.

Note:The PSPP does not provide a supplementary pension for non-OPS service. As such, the buyback cost relates to the pension payable from the PSPP only.
7
The member receives the cost quotation from OPB and makes the following choices.
When members choose to... Then members...
decline the purchase notify OPB in writing that they do not want to make the purchase.

Note:If members do NOT respond within the time period, the option to purchase automatically lapses.
accept the entire purchase submit the appropriate payment.
accept the partial purchase of the service quoted

Deadlines for submitting application

The Application to Purchase Pension Credit Form OPB 1043 must be received by OPB within 24 months from the earlier of the date the member joined the PSPP or OPSEU Pension Trust (if the member joined the PSPP under a mandatory transfer from OPSEU).

The information requested in Stage 4 above does not have to accompany the application. However, OPB cannot process the application without this information. The member's salary rate at the date of OPB's receipt of complete documentation is used to calculate the buyback cost. Any delay in providing the completed forms and required information may impact the buyback cost.

Important: If the member misses the 24-month deadline to submit the application, then the opportunity for purchasing credit lapses.

Payment options

This section describes

For members who are on LTIP, click here to link to Long Term Income Protection for a description of Remittances for a Buyback for Members in receipt of LTIP.

Options

Payment options depend upon the type of service the member is buying. For specific details concerning payment options in each situation, please refer the member directly to OPB Publication Understanding Your Pension Credit (PDF).

This table describes members' payment options for buybacks.

When the buyback is for... Then the member may pay with...
non-OPS service before 1992 a direct transfer from the registered pension plan of the former employer using the Direct Transfer Form T2151 .

Additional amounts or "top ups" may be paid by cheque or transfer from an RRSP or Ontario LIRA.
non-OPS service after 1991
  • cheque
  • transfer from an RRSP or Ontario LIRA, using a T2033 form
  • transfer from an RPP using a T2151 form
  • a combination of the above.
  • prior non-contributory OPS service
  • prior contributory OPS service
  • Leave(s) of Absence Without Pay

Exceptions

Members from the following two associations may choose to pay through payroll deductions for up to 10 years when pension credit purchase cost is $500 or more:

  • Ontario Crown Attorney's Association, and
  • Association of Law Officers of the Crown.

Payment deadline

Members have 92 days from the date OPB mailed the cost quotation to purchase the credit. Payment must be made in full within the deadline.

Exception: If the member accepts the cost quotation before the 92-day deadline, OPB may accept a payment after the deadline. However, the cost will be adjusted to include additional interest to the date of payment.

Note: If payment is not received and the 24-month deadline has not expired, the member may submit another application.

Income Tax Act implications

Under the Income Tax Act (ITA), there are certain limits to the

  • service a member may purchase
  • amount of pension credit a member may accrue in respect of that service, and/or
  • tax-deductibility of cash payments.

Each member's income tax situation is unique and may be affected by any of the following limitations.

When the... Then...
member pays for the buyback of pension credit with a transfer of funds from an RRSP, LIRA, or RPP the transfer may be tax-sheltered, provided the funds are transferred using a Canada Revenue Agency (CRA)
  • T2151 Direct Transfer Form , or
  • T2033 Form.
The transfer is not tax-deductible because the member has already received a tax deduction for the original contribution in the past.

(1) This is simply a move from one tax-sheltered vehicle to another.
(2) Only funds locked-in under the PBA (Ontario) are accepted from a LIRA.
member pays for the buyback in cash (via cheque) the member may claim all or part of the payment as an income tax deduction in the year of purchase, subject to CRA approval.
buyback
  • is for a period of employment after December 31, 1989 and
  • has been approved by CRA (see below)
the entire amount paid by cheque may be tax deductible in the year of purchase.
member does not have sufficient RRSP contribution room the member must make a "qualifying withdrawal" from their RRSP contribution so as not to exceed the amount of RRSP room available.

Note: The member may wish to seek independent financial advice with regard to proceeding with the buyback.

CRA approval process for buybacks after December 31, 1989

This table describes the process for PSPA approval when a member purchases or buys back credit in the PSPP for service after December 31, 1989.
 

Stage Description
1 The member submits payment for the buyback to OPB.
2 OPB receives the payment and requests approval for a Past Service Adjustment (PSPA) from the Canada Revenue Agency (CRA).

Rationale: OPB must ensure there is enough RRSP contribution room to accommodate the purchase.
3 OPB provides the member with confirmation of the change in credited service and pension credit date once the purchase is complete.