Administrators > Administration Manual > Section 5 Leaves of Absence and Buybacks > Non-Vested Prior Service

Non-vested Prior Service (formerly known as Prior Service)

Forms Checklist:

Non-vested Prior Service Election
CAAT Pension Plan Contribution Remittance Summary (pdf) (Word)
T4

Purchasing Past Service: A Buyer's Guide

Supporting Documents:

Letter noting Member's name, SIN, current annual salary rate, dates of Purchasable Service and name of previous College

Definition / Eligibility:

A prior period of Pensionable Service in the CAAT Pension Plan which a rehired Member can buy because, upon termination, the Member's benefit was not vested.

College Responsibilities:

Notify the CAAT Pension Plan in writing that the Member wants to purchase this service. Provide the Plan with the prior service dates and current annual salary rate.
Confirm the information on the Non-vested Prior Service Election form received from the Plan and forward it to the Member for completion. When it is complete, return it to the Plan.
Tell Member that the cost of buying this service at regular contributions must be paid in a lump sum and is valid for six months after the date Membership starts. After the six month period, the cost will be the current actuarial cost. The Member will be responsible for the full amount.
Tell Member that purchase can be made in cash or by transfer from an RRSP. For Members purchasing post-1989 service, a PSPA calculation is required. See: Past Service Pension Adjustment (PSPA).
For cash purchases, the cheque you provide to the CAAT Plan must include both Member and College portions of the payment. The Plan does not process the purchase until both parts of the payment are received. Any incomplete or partial payments will be returned, and the buyback process suspended until the full amount is received.
For purchases at actuarial cost, the deadline for making full payment is the earlier of three months after the date of mailing of the Non-vested Prior Service Election form by the Plan, or termination or retirement. If this deadline passes before termination or retirement, the purchase will be recosted using the current actuarial cost, which changes over time.
If request for purchase requiring a PSPA is within this time frame and the PSPA is approved past the time frame, the cost of the purchase as originally quoted will be honoured, as long as the Member pays within 2 weeks of the notice of PSPA approval being sent to the College.
Remit payments to the designated financial institution with the CAAT Pension Plan Contribution Remittance Summary.
At year end, report the amount paid by the Member on the Member's T4.
Tell Member that if they were eligible for a refund of contributions at termination and did not receive it, the cost of the purchase will be reduced by that amount.

CAAT Pension Plan Responsibilities:

Review and confirm the Member's eligibility to purchase service.
Prepare a Non-vested Prior Service Election form and send it to the College.
Record contract.
After the funds are received, adjust the Member's pension records to include the Pensionable Service, contributions and deemed earnings.

Member Responsibilities:

Sign and date Non-vested Prior Service Election form and give it to College.
Give lump sum payment to College (cheques must be made payable to the College).

Plan Text Reference: 2.38(5), 3.03(3)(b), 4.04(5)

December 2008