Make a decision on buying service

Explore the factors involved when buying service and what you should consider. Buying service can potentially increase your future pension.

How buying service affects your pension

Buying service may increase your future pension. It may also increase your contributory service, allowing you to retire sooner with an unreduced pension.

To find out how buying service could affect your pension, sign in to My Account and use the purchase cost estimator. The estimator will show you the estimated cost to buy service as well as the estimated improvement to your future pension.

You may also want to speak with an independent financial planner to discuss how buying service fits into your financial future.

The example below illustrates what buying service could look like for one plan member based on their unique situation. For the best information about your own situation, use the purchase cost estimator on My Account.

Example: Kim wants to buy one year of service for a general leave of absence.

Profile image of Kim  

Kim’s current annual salary is $69,159. To buy service for one year, it will cost her about $15,500.

If Kim doesn’t buy service, her estimated annual pension will be just over $44,930. If she buys the service, her estimated annual pension will increase by about $1,672 to just under $46,603.

Here's what Kim's annual pension would look like if she buys service:

Graphic of buying service for Kim

How buying service compares to other options for retirement savings

You may wonder how buying service compares to other options, like contributing to your RRSP. Only you can decide what retirement savings options are best for you. Here are some things to keep in mind when you decide:

  • Your Teachers’ Pension Plan pension is a defined benefit pension. In a defined benefit pension plan, your pension is based on a formula that uses your years of service and your highest average salary. Your basic monthly retirement income is guaranteed, regardless of investment returns.
  • Your RRSP balance depends on investment returns. That means you can’t predict how much you’ll get when you retire.
  • For some leave types, your employer will pay for part of your purchase. If you don’t buy service, you won’t have access to those extra employer contributions.

You may also want to speak to an independent financial planner to discuss how each option fits into your financial plans.