Leaves of absence
The Public Service Pension Plan (PSPP) allows members to continue, if they choose, to earn pension credit when they go on an authorized unpaid leave of absence.
We've prepared this section to help you to understand how leaves of absence are treated in the PSPP. The following topics are covered:
- Types of leaves
- Income Tax Act (ITA) maximums for leaves of absence without pay
- Employer matching of contributions during a leave of absence
- The cost of contributing during a leave of absence
- Tax implications
See Employer Responsibilities for direction on how to report or amend a leave of absence.
Types of Leaves
Paid leaves of any duration or unpaid leaves of absence that last 30 calendar days or less
These leaves do not affect a member's PSPP pension. Contributions must continue to be paid either during the leave (if paid), or when the member returns to work (if unpaid).
Unpaid leaves that last 31 or more calendar days
If a member takes one of the following leaves of absence, which lasts 31 days or more, report it to OPB through the employer portal:
- Pregnancy, parental, adoption leaves
- Illness/WSIB leaves
- Family ESA leaves, which include:
- Family medical leaves
- Family caregiver leaves
- Care for a critically ill child leave
- Care for critically ill family member (over 18) leave
- Domestic or sexual violence leaves
- Child death leaves
- Child disappearance leaves
- Special or education leaves
If the member wishes to obtain credit for the leave, they can elect to pay contributions during the leaves, or wait to buy back the credit when they return to work.
Important: A member on LTIP/LTD is not considered a leave of absence. Please review our Disability section for more information LTIP.
Income Tax Act (ITA) maximums for leaves of absence without pay
The combined pension credit accrued by a member of the Plan after 1990 while on a leave of absence without pay may not exceed a total of five years. Credit purchased after 1991 for service prior to 1992 for a special leave cannot exceed 2 years.
Additional leave for pregnancy, parental, or adoption leaves
Members may take up to an additional three more years of leave for pregnancy, parental or adoption, provided each leave is limited to 12 months from the birth or adoption of a child.
Note: Please review our leave of absence transaction tip sheet (PDF) regarding the legislated maximums for most types of leaves.
Employer matching of contributions during leaves of absence
If a member contributes during a leave of absence, the employer is required to match contributions for
- Pregnancy, parental, and adoptions leaves,
- Family ESA leaves*, and
- Illness or work-related injury leaves.
The member must pay both the employer and member portion of contributions for special and education leaves.
Where the contributions related to the leave must be matched by the employer, members can also wait until after they return to work to purchase the credit related to their leave. If they initiate the purchase within 24-months of returning to work, the cost is matched by the employer. If the member doesn't initiate the buyback within the 24 month window, the cost is not matched by the employer.
*Family ESA leaves include: family medical leaves, family caregiver leaves, critically-ill child care leaves, critically ill family member (over age 18), domestic or sexual violence leaves, child death leaves, and child disappearance leaves.
The cost of contributing during a leave of absence
Please report a member's leave of absence to OPB before it begins so that we can send the member a costing. Generally, costings are mailed to members 15 working days before the leave starts.
We calculate the required contributions using current PSPP contribution rates and the member's annual salary on the day immediately before the leave starts.
If the leave extends into the following calendar year, the salary rate used to calculate contributions is escalated to reflect the cost of living adjustment (COLA) used for annual pension increases. This is required under the Plan text.
Where the member contributes during the leave, we mail out the adjusted contribution figures to members each January. Otherwise, the member can buy back the credit related to the leave when they return to work.
If a member elects to contribute during their leave of absence their contribution options* are as follows:
|Leave Period||Contribution Options|
|Less than three months||The member must pay the full amount of contributions by the end of the leave in a single payment|
|More than three months in duration and starts and ends in the same year||The member can choose between paying by instalment every three months or by making a single payment|
|More that three moths in duration and extends into the following year||The member must pay by instalment every three months|
* Members on a parental/pregnancy/adaption leave can also elect to pay contributions from the SUB allowance. See Employer Responsibilities for more information.
If the member doesn't contribute during the leave, they can choose to apply to buy back pension credit when they return to work. The cost will depend on whether they apply to purchase the leave period within 24 months of the last day of their leave.
Important: For leaves of absence where the employer is required to match the member's contributions, we will only invoice the employer after the member has paid. See Employer Responsibilities for more information.
Contributing during a leave of absence has the following income tax implications for members:
Income tax receipts
We will send the member an income tax receipt for any contributions paid during a leave of absence in February of the following year. Contributions are tax-deductible in the year they were paid.
Pension adjustments (PAs)
If the member contributes during their leave of absence, the employer is responsible for including the pension benefit earned during the leave into the member's annual pension adjustment. See the Pension Adjustment section for more information.