Buybacks

What's on this page:

    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
    • select a payment method, and
    • in some cases, receive approval from the Canada Revenue Agency (CRA) for the Past Service Pension Adjustment (PSPA) for post-1989 service.

    Application and supporting documents

    In most cases, the member must submit a completed OPB1043 - Application to Purchase Pension Credit (PDF) which may be downloaded from the OPB website by clicking on the above link.

    With the exceptions of the scenarios indicated below, the member must upload the application via e-services, mail or fax the application to OPB. OPB currently does not accept submissions of completed forms via email for privacy reasons.

    Exceptions: 

    1. Where the member is purchasing prior non-contributory service with a PSPP employer, they must give the OPB1043 to their employer. The employer will attach the application to a Service Report for Buyback transaction for submission through OPB’s Employer Portal.
    2. If the member is purchasing pension credit related to a temporary part-time work arrangement, both the member and employer must complete an OPB1151 – Temporary Part-time Work Arrangement Application to Purchase Pension Credit (PDF). The employer will complete their portion of the form and submit it through OPB’s Employer Portal as a secure message attachment.

    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 eligibility, calculate the cost and/or the PSPA, etc.

    Important: A member’s eligibility to perform a buyback and the cost of the buyback is based on the date OPB receives a complete application to purchase. OPB will not consider a member’s application complete until we have received all required supporting documentation, including the Service Report for Buyback transaction from the employer (where applicable).

    Buyback deadlines

    The costing basis for some types of buyback depend on whether application to purchase is made within 24 months of the member’s Plan Membership Date, end of a leave, or other applicable date. We ask that employers submit a member’s OPB1043 - Application to Purchase Pension Credit (PDF) or OPB1151 - Temporary Part-time Work Arrangement Application to Purchase Pension Credit (PDF) to OPB promptly so as to avoid any possible increases in cost to the member. See additional information with respect to the impact the 24-month costing window has on the costs related to buybacks (PDF).

    For more information, please direct the member to our website (www.opb.ca) or to contact OPB’s Client Care Centre at 1-800-668-6203.

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

    Prior non-contributory service with a PSPP employer

    This section describes the purchase of pension credit for a period of employment with a PSPP 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 fixed-term basis or where membership was optional.

    It includes these topics:

    Process for purchasing pension credit

    This describes the process for buying back non-contributory service with a PSPP employer.
     

    Stage Description
    1 The member completes and submits the OPB1043 - Application to Purchase Pension Credit (PDF) to their employer.
    2 The member requests their employer to complete and submit a Service Report for Buyback transaction through OPB's employer portal(opens in a new tab). The member's buyback application must be attached to the transaction.

    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's buyback application (OPB1043) must be attached to 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 the member does NOT respond within the time period, the costing lapses and the member must re-apply.
    accept the entire purchase submit the appropriate payment or elect to start payroll deductions.

    Note: Where the member elected a partial purchase of service and subsequently wishes to purchase the outstanding balance, they have to re-apply.
    accept the partial purchase of the service quoted

    Deadlines for submitting application

    The OPB1043 - Application to Purchase Pension Credit (PDF) should be received by OPB within 24 months from the earlier of the date the member joined the PSPP or OPSEU Pension Plan (if the member joined the PSPP under a mandatory transfer from OPSEU). Otherwise, the cost to buy back this service may increase.

    For more information, please direct the member to our website (www.opb.ca) or contact OPB’s Client Care Centre at 1-800-668-6203.

    Important: A member’s application to buyback is not complete until we receive the OPB1043 - Application to Purchase Pension Credit (PDF) and all necessary supporting documentation, including the Service Report for Buybacks Transaction (where applicable). The salary used in the costing is the rate in effect when a complete application is received. Any delays in OPB receiving a complete application may impact the buyback cost.

    Prior contributory service with a PSPP employer (Reinstatement Buyback)

    This section describes the purchase of pension credit for a prior period of employment with a PSPP 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 transfer to a locked-in RRSP or similar retirement vehicle, or
      • a deferred 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 a reinstatement buyback (a buyback of prior contributory service)

    This describes the process for buying back pension credit, including OPSEU Pension Plan credit, where the member received a refund or commuted value payment, also known as a reinstatement buyback.

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

    Note: For prior credit in OPSEU Pension Plan, the member provides OPB with:
    • membership data
    • pension credit
    • 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 costing lapses.
    accept the entire purchase submit the appropriate payment or elect to start payroll deductions.
    accept the partial purchase of the service quoted
    Note: Where the member elected a partial purchase of service and subsequently wishes to purchase the outstanding balance, they have to re-apply.

    Deadline for submitting application

    The OPB1043 - Application to Purchase Pension Credit (PDF) should be received by OPB within 24 months from the earlier of the date the member joined the PSPP or OPSEU Pension Plan (if the member joined the PSPP under a mandatory transfer from OPSEU). Otherwise, the cost to buy back this service may increase.

    The following table summarizes the impact of the 24-month costing window window on reinstatement buybacks.

    Important: If the member misses the initial 24-month window to submit the application, the cost to buy back this service may increase.

    Scenario Cost of reinstatement buyback within the member’s 24-month buyback costing window Cost of reinstatement buyback outside of the member’s 24-month buyback costing window
    The member last joined the PSPP before October 1, 2021
    • The member’s buyback cost is the greater of:
      • the amount calculated using the single contribution formula, and
      • the lump-sum (plus interest) received for the period of service
    • The employer may be required to pay partial or full matching of cost
    • The member’s buyback cost is calculated using an actuarial formula
    • The employer does not match the member’s cost
    The member last joined the PSPP on or after October 1, 2021
    • The member’s buyback cost is the greater of:
      • the lump-sum received for the period of service (plus interest), and
      • the cost using an actuarial formula
    • The employer does not match the member’s cost

    Supporting documentation

    Prior OPSEU Pension Plan membership data does not have to accompany the application. However, OPB does not consider the application complete 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.

    Deferred pension in OPSEU Pension Plan

    Members who have a deferred pension with the OPSEU Pension Plan must submit an OPB1043 - Application to Purchase Pension Credit (PDF).

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

    For more information, please refer the member to our website (www.opb.ca) or have them contact OPB’s Client Care Centre at 1-800-668-6203.

    Leaves of absence without pay: more than one month

    This section describes buyback of eligible pension credit for a leave of absence of more than one month (i.e., 31 or more calendar days) 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 leaves
    • Illness/WSIB leaves
    • Family ESA leaves, which include:
      • Family medical leaves
      • Family caregiver leaves
      • Care for a critically ill child leave
      • Care for a critically ill family member (over 18) leave
      • Domestic or sexual violence leaves
      • Child death leaves
      • Child disappearance leaves
    • 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 previously 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 through an employer portal transaction.
    2 OPB
    • receives the completed application
    • calculates the cost to purchase pension credit for the leave period
    • 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 calendar days or less, members are required to pay contributions for the leave period as arranged with the employer either prior to the leave starting or after their return. OPB does not provide a cost quotation for a leave of absence of 30 calendar 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 the member does not want to make the purchase.

    Note: If the member does NOT respond within the time period, costing lapses and the member will have to re-apply.
    Accept the entire purchase submits the appropriate payment or elects to pay through payroll deductions.
    accept the partial purchase of the service quoted
    Note: Where the member elected a partial purchase of service and subsequently wishes to purchase the outstanding balance, they have to re-apply.
    4 If applicable, the 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 in effect on the date it receives the complete documentation.

    Application deadline for leaves that lasted 31 days or more

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

    Important: Any delay in submitting forms and transactions may impact the buyback cost since the member's salary at the date of OPB's receipt of a complete application with supporting documentation is used to calculate the buyback cost.

    If the member misses the initial 24-month window to submit the application, the cost to buy back this service may increase.

    For more information, please refer the member to our website (www.opb.ca) or have them contact OPB’s Client Care Centre at 1-800-668-6203.

    OPB cost quotation

    If the application to purchase credit for a leave of absence is made within the initial 24-month window, 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.
    All other leave of absence types that are 31 or more calendar days the employer must remit both member and employer contributions for the period of the leave.

    If the application to purchase credit for a leave of absence is made outside the initial 24-month window, OPB's cost quotation is actuarial.

    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 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.

    Pension credit 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;
    • a termination benefit from the former employer that meets the criteria for a buyback.

    This section includes these topics:

    Qualification for supplementary benefits

    Pension credit purchased from another registered pension plan is not eligible for supplementary benefits from the Public Service Supplementary Benefits Account.

    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 pension credit 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 pension credit or assets 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 service from another registered pension plan.

    Stage Description
    1 The member completes an OPB1043 - Application to Purchase Pension Credit (PDF) and forwards the form to OPB.
    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 pension credit
      • 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.
    Pension Credit Accrued Prior to January 1, 1992

    For any pension credit 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;
    • available for transfer from the previous employer's pension plan to the Public Service Pension Plan.
    5 The member submits

     OPB1043 - Application to Purchase Pension Credit (PDF), and the letter from the previous employer to OPB.
    6 OPB calculates the buyback cost using the member's salary 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 costing lapses.
    accept the entire purchase submit the appropriate payment or elects to start payroll deductions.
    accept the partial purchase of the service quoted

    Note: Where the member elected a partial purchase of service and subsequently wishes to purchase the outstanding balance, they have to re-apply.

    Deadlines for submitting application

    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.

    For more information, please refer the member to our website (www.opb.ca) or have them contact OPB’s Client Care Centre at 1-800-668-6203.

    Buybacks for temporary part-time work arrangements

    This section describes the buyback of pension credit for members who participated in an eligible temporary part-time work arrangement with a PSPP employer.

    Read OPB’s announcement about this buyback category (PDF).

    It includes the following topics:

    • Eligibility criteria
    • Process for buyback of temporary part-time work arrangements
    • Deadlines for submitting the application

    Eligibility criteria

    Full-time credit for periods of temporary part-time work can be bought back when the member returns to full-time work if the following criteria are met:

    • The part-time work arrangement is temporary.
    • The member and employer have agreed to the terms of the temporary part-time work arrangement, including its duration, in advance.
    • The conditions in the federal Income Tax Act are met, including the cumulative limit on eligible periods of temporary absence and/or reduced pay.

    Process for buyback of temporary part-time work arrangements

    This table describes the process for buying back pension credit related to a temporary part-time work arrangement.

    Step Description
    1

    The eligible member completes page 1 of the OPB1151- Temporary Part-time Work Arrangement Application to Purchase Pension Credit (PDF).

    Note: A separate application is required for each eligible period of temporary part-time work
    2 The employer must complete the remaining pages of the OPB1151-Temporary Part-time Work Arrangement Application to Purchase Pension Credit (PDF) as follows:
    1. The employer must formally certify that the period of part-time work was temporary and that its terms (including the end date) were agreed in advance between the employer and the member.
    2. The employer must also confirm the dates of the temporary part-time work arrangement, the member’s rate of pay, and part-time ratio (or hours of work, if no ratio is available).
    Important: Please contact OPB’s Employer Relations team for direction if additional fields are required to confirm the details of the member’s temporary part-time work arrangement (e.g., if the member’s part-ratio changed more times than is supported by the application form).
    3

    The employer submits the application through OPB’s Employer Portal as a secure message attachment.

    Note: Please select “Buyback: Temporary Part-time Work Arrangement” as the secure message type.
    4 OPB
    • receives the completed application
    • calculates the cost to establish full pension credit for the period of temporary part-time work
    • sends the cost quotation to the member
    5 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 the member does not want to make the purchase.

    Note: If the member does NOT respond within the time period, costing lapses and the member will have to re-apply.
    Accept the entire purchase submits the appropriate payment or elects to pay through payroll deductions (this option is not available for deferred or retired PSPP members who elect to buy back pension credit related to prior part-time work arrangements).

    Accept the partial purchase of the service quoted

    Note: Where the member elected a partial purchase of service and subsequently wishes to purchase the outstanding balance, they have to re-apply.

    		  
    6 If applicable, the employer matches member contributions and remits them to OPB.

    Deadlines for submitting the application

    The OPB1151 - Temporary Part-time Work Arrangement Application to Purchase Pension Credit (PDF) should be received by OPB within 24 months from either

    • The date that the member returned to full-time employment; or
    • August 1, 2021, for a member whose part-time arrangements ended prior to August 1, 2021.

    Otherwise, the cost to buy back this service may increase and will not be matched by the employer.

    The following table describes scenarios where employers must match the cost related to the buyback of temporary part-time work arrangements.

    Scenario When does the employer match the cost to buyback? When doesn’t the employer match the buyback cost?
    1. An active member purchases full-time credit for a period that ends after August 1, 2021 The employer will be required to match the contributions if the member purchases the credit within 24 months of the end of the temporary part-time work arrangement. If the member purchases the pension credit more than 24 months after the temporary part-time work arrangement ends, the cost is actuarial and will be fully borne by the member.
    2. An active member purchases full-time credit for a period that ended before August 1, 2021 The employer will be required to match the contributions if the member purchases the credit within a 24-month window that starts on August 1, 2021. If the member purchases the pension credit after July 31, 2023, the cost is actuarial and will be fully borne by the member.
    3. A retired or deferred member purchases full-time credit for a period prior to the end of their active PSPP membership. The employer will be required to match the contributions if the member purchases the credit within a 24-month window that starts on August 1, 2021 N/A (There is no option to purchase this credit outside the 24-month window that closes on July 31, 2023.)

    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...
    service before 1992 in another RPP 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 or by payroll deductions.
    service after 1991 in another RPP
    • cheque
    • transfer from an RRSP or Ontario LIRA
    • transfer from an RPP
    • combination of the above
    • prior non-contributory service with PSPP employer
    • prior contributory service with PSPP employer
    • Leave(s) of Absence Without Pay
    • Periods of temporary part-time work arrangements

    Payroll deductions

    If a member elects to pay for a buyback through paying deductions, OPB will send you a Payroll Deduction Authorization form - OPB1016 with the information you need to start deductions, including whether the cost is matched by the employer.

    Once the payroll deductions have been set up, please sign the OPB 1016 form and return it through the employer portal as a secure message attachment.

    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.

    Income Tax Act implications

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

    • service for which a member may purchase pension credit
    • amount of pension credit a member may accrue in respect of that service, and
    • 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-deferred, 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-deferred 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)
    Note: The income tax rules for periods of employment prior to January 1, 1990 are different. Please direct members to Canada Revenue Agency for more direction.    		 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 input from one of OPB's Client Service Advisors for 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 Pension 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 pension credit once the purchase is complete.