Tax information for active members

Learn about your pension and income taxes, including what you need to know about pension adjustment amounts and your RRSP contribution limit.

Buying service and RRSP contribution room

You can buy service using a combination of cash and RRSP transfer. However, if you are buying past service, and the resulting past service pension adjustment is greater than your available RRSP contribution room, you may have to make a qualifying withdrawal from your RRSP. A qualifying withdrawal is an amount you withdraw from your RRSP so that you can receive past service benefits.

In certain cases, you may also need to make a qualifying withdrawal when transferring service from the pension plan of a previous employer.

Canada Revenue Agency (CRA) will contact you in writing if you must make a qualifying withdrawal to transfer or buy past service. If you decide not to make a qualifying withdrawal, you must notify both CRA and BC's Teachers' Pension Plan.

In some situations, CRA may allow you to over-contribute to your RRSP. If you are considering buying past service and do not have enough RRSP room available to do so, contact CRA to find out if you are eligible.

If your past service pension adjustment is not approved by CRA and you are not able to make a qualifying withdrawal, you cannot buy the past service.


External tax information link

Read CRA's explanation of pension adjustments