Members > Member Handbook > Belonging to the Plan > Purchasing Service

Purchasing Service

Purchasing Past Service: A Buyer's Guide:
Making your service work for you
What will it cost?
Deadlines
Tax Considerations
Types of Service

Pregnancy/Adoption Parental Leave

Buying Leaves of Absence

Purchasable leaves of absence include unpaid time off and pregnancy/parental leave.

Unpaid leave of absence

To purchase unpaid time off, you pay two times your normal contributions for the period being purchased. Your College will calculate the cost using your rate of Contributory Earnings immediately before the leave, adjusted for any salary increases that occurred during the leave.

The deadline for purchases at two times contributions is six months from the end of the leave (or six months from the date you became a Member if later). Past the six month period, the cost will be the current Actuarial Value of the service being purchased. You have three months from the date the Plan issues a cost calculation to make the payment. If the payment is not made within three months, the cost calculation is no longer valid, and a new one must be prepared by the Plan. This is because current Actuarial Values change monthly.

Pregnancy/parental leave

A mother is entitled to 17 weeks of pregnancy leave and 35 weeks of parental leave. Fathers and adoptive parents may take up to 37 weeks of parental leave. The cost of buying a pregnancy/parental leave is equal to the contributions you would normally pay had you not been on leave. Your College matches your contributions.

The deadline for purchasing leave at your normal contribution rate is six months from the end of the leave. Past that date, the cost will be the current Actuarial Value of the benefit. The deadlines to make payment on an actuarial basis that apply to other leaves of absence also apply to pregnancy/parental leaves.

It is assumed you will purchase periods of pregnancy/parental leave unless you submit a written notice that you choose not to do so. You should discuss your choices with your Human Resources Deparment before you go on leave.

Income Tax Limits on buying leaves

For unpaid leaves of absence after December 31, 1990, income tax law limits purchases to enhance Pensionable Service to no more than 5 years (plus up to 1 year for each pregnancy or parental leave to a maximum of 3 years).

A further tax consideration

If you choose to pay for a leave of absence before April 30 of the year following the year in which the leave ends, it will be included in the Pension Adjustment (PA) reported for the period. If you pay for the leave after the April 30 deadline, a Past Service Pension Adjustment (PSPA) is required and you may need to create contribution room by withdrawing funds from your regular RRSP. This would be considered taxable income in the year the funds are withdrawn. The payment can only be made after the Canada Revenue Agency has approved the PSPA.

Definitions of these terms and more information on income tax issues

January 2008