Learn about gaps in service
Learn about buying service for leaves of absence and other times you were not contributing to the plan.
Over the course of your career, there may be times when you decide to take a leave from work—such as maternity, parental/adoption or general leave. This creates a gap in service.
These unpaid leaves will affect your pension. During these times, you do not earn pensionable or contributory service because you are not working or contributing to the plan.
- Pensionable service affects the monthly amount you receive when you retire
- Contributory service is used to determine if your pension will be reduced and by how much
However, you may be able to buy service that covers your leave. This may increase the amount of your pension when you retire and could get you closer to an unreduced pension.
Other ways you may be able to increase your pension
- Buying arrears for a period when you were eligible to make contributions to the plan but your employer did not deduct them.
- Buying non-contributory service for a period when you worked for a plan employer but were not making pension contributions (e.g., if you were a teacher teaching on call).
- Buying service for periods of reduced pay.
- Receiving credit if you took time off work to raise children. You can claim a credit for up to five years of contributory service. You do not have to pay for this credit.
A note about long-term disability leave
If your long-term disability benefits are provided by a group disability plan approved for pension purposes, you will continue to accumulate pensionable and contributory service while you are away from work. In this case, you do not need to buy service.
If your long-term disability benefits are provided by a group disability plan not approved for pension purposes, you may be able to buy service when you return to work.
Not all service is available to buy. For example, you cannot buy:
- Service that would put you over the federal Income Tax Act leave limits for pension and RRSP contributions.
- Service for a leave of absence that ended more than five years ago.
- Service earned before January 1, 2018, if you reached 35 years of service before this date (service earned on or after January 1, 2018, is not capped).
- More service than you would have normally worked (e.g., if you hold a 0.8 full-time-equivalent (FTE) contract, you can only purchase up to 80 per cent of FTE service).
- Time spent participating in a work stoppage as part of strike action. For example, if you participate in a full day of strike action, you will not accrue pensionable service for that day.
- Time off work that is not considered an approved leave of absence.
There are also some restrictions to buying service for a period when you contributed to a registered pension plan with another employer. Contact the plan for more information.
Making the Most of Your Pension
Your pension is an investment in your future. It’s important to know how the decisions you make today can affect your future pension. Take the 45-minute online course or participate in the 75-minute instructor-led webinar to learn more about your pension.Start learning