Leaves, time off and retirement
If your work situation changes because of COVID-19, your pension could be affected. Learn about your options if you take a leave, have your hours reduced, are temporarily laid off or change your retirement plans.
Note: all leaves are subject to Income Tax Act limits.
Earliest retirement ages haven’t changed because of COVID-19. If you do retire early, you may receive a reduced pension.
Employment Standards Act leaves
If you take an unpaid leave, you have the option of buying service for the period of your absence. Leaves taken under the Employment Standards Act (ESA), including the new COVID-19-related leave, are shared-cost leaves. If you choose to buy service for such a leave, both you and your employer will pay a portion of the purchase cost.
A leave with full pay doesn’t count as a leave because both you and your employer are still contributing to the plan.
General leave and reduced hours
If you take an unpaid leave approved by your employer that isn’t covered under the ESA, you may be able to buy service for this period—it will be treated as general leave. For general leaves, you’ll be required to pay the full cost of the purchase of service.
If your hours are reduced, you may be eligible to buy the service for the difference between your normal (full-assignment) hours and the hours you actually work.
According to the Canada Revenue Agency, all the following must apply:
- You must have been employed by your employer for at least three years
- You may only purchase a period of reduced pay that occurs after those three years
- You must have been working your normal (full-assignment) hours sometime before your hours were reduced
If you choose to buy this service, it will be treated as a general leave. You’ll be required to pay both your share and your employer’s share of the cost.
Leave because of non-compliance with a mandatory vaccine policy
Section 52.12 of the ESA entitles you to unpaid COVID-19-related leave in certain circumstances, but non-compliance with a vaccine mandate is not one of those circumstances. If you are on leave for this reason, the leave is considered a general leave.
If the leave is unpaid, you will not earn pensionable or contributory service but may be eligible to buy service.
If you’re laid off and on a recall list, you may buy service for the period of time you’re away from work – it will be treated as a general leave. You’ll be required to pay the full cost of the purchase.