Purchasing Service

During your college career, you may have some periods of time when you didn't contribute to the CAAT Pension Plan. If so, you have gaps in your pensionable service. You can consider buying the service back to increase your pension.

Do you work part-time or on contract?

The CAAT Pension Plan is introducing DBplus, a new defined benefit design for Other than regular full-time (OTRFT) members who work part-time or on contract. All OTRFT members will make the switch to DBplus on January 1, 2019.

Discover how DBplus will maximize the lifetime pensions of OTRFT members.

When you buy back an unpaid leave of absence or some previous eligible service, you purchase that period of time to add it to your pensionable service and the length of your CAAT Plan membership. More pensionable service means an increased pension benefit when the time comes to retire. It could also mean that you could retire on an unreduced pension sooner, or have a smaller reduction if you don't meet the requirements for an unreduced pension.


2017 faculty strike purchase information

As a Plan member who was on strike, you will be able to purchase the pensionable service lost during the strike. The CAAT Plan is working on a special process “window” to efficiently deal with the expected high number of strike purchase requests. The window will start in June 2018. Read the complete announcement.

Strike purchase FAQ

Questions from the Strike purchase webinar

Is the settlement pensionable?

The lump sum payments (of $900 and $450) that are being paid to full-time and partial-load faculty are not pensionable.

The retroactive salary increase that will be applied effective October 1 IS pensionable. This means the cost of your service purchase for the strike period (which will be provided to you), will take into account your increased earnings as a result of the retroactive salary increase.

Questions about Taxes

What are the tax implications of a service purchase in 2018?

After April 30, 2018 purchases made via cash will result in a Past Service Pension Adjustment (PSPA) which removes RRSP contribution room. The PSPA amount will be provided with your quote so you are aware in advance of the purchase how much RRSP room is required.

If I retire March 31, 2018 and purchase the strike period, will I have the tax deduction for 2017?

Any cash purchases will be tax deductible and the CAAT Plan will issue a tax slip in the year the payment is made.

Is the strike purchase payment tax deductible?

Any cash purchases will be tax deductible and the CAAT Plan will issue a tax slip in the year the payment is made.

Can you use any RRSP account for the top up of the purchase cost?

Payments must be made in full, all cash or all RRSP

Does the PSPA adjustment from the CRA mean that we might need to pay more or less taxes or will it mean that our allowable RRSP contribution might change? Could we be subject to some sort of over-contribution penalty if we contribute to our RRSP in May as a result of making the strike purchase?

PSPAs remove RRSP contribution room, but they do not impact taxes. Always ensure you review your latest notice of assessment from CRA when deciding how much to contribute to RRSPs.

I max out my RRSP each year. Do I need to leave room in my 2017 contribution to allow for the strike service purchase or will the tax implication show on the 2018 return?

The strike period will not impact your 2017 contribution room, but it could result in slightly more RRSP contribution room in 2018. When we provide the purchase cost in spring 2018, we will also inform you of the PSPA amount which is the RRSP room that you are required to have to complete the purchase.

Will our T4 income show 5 weeks less income regardless of whether we purchase the strike service or not?

Yes, and when you purchase the strike service, the CAAT Plan will issue a tax receipt.

Can we transfer from our RRSP to purchase the strike period?

Yes. RRSPs can be used to purchase the strike period. If you are retiring before June 30, notify your employer that you wish to use RRSP funds for the purchase, and they will provide you the necessary T2033 form for your financial institution. RRSP transfers are the member's responsibility: you must ensure transfer is completed. Payment must be the full cost of the strike period.

Will we lose a portion of our tax deduction with the missed contributions during the strike? Do I need to top-up my personal RRSP to make up the difference?

Your pension contributions for 2017 without the strike purchase will be less than they would be if you had not been on strike. Any purchases made with cash are tax deductible.

Questions about the purchase process

Where do I send my payment?

All payments are to be made to the CAAT Pension Plan.  If you are retiring, your Employer will assist you with direction. 

Since you can make this purchase at any time before retirement, if you are not sure when you are going to retire, does it make more sense to wait until just before retirement to determine whether the purchase is worth doing?

If the precise impact to your retirement pension is an important factor in your decision to purchase, then yes, waiting until closer to retirement may be best for you.

If I have already calculated my cost for strike service, is it possible to pay earlier than June 2018?

No. The only purchases that can be completed before June 2018 are for terminating or retiring members.

Is it possible to make the purchase in installments?

No. The purchase must be made in one lump sum.

How much notice does the CAAT Plan need to process a pension request?

Once we receive a pension application we will send out a retirement option package within 30 days.

When will we receive information on the exact amount of our payment owing? Will there be options to pay this amount with our paycheque, or does it have to be as a once-only lump sum payment?

Members will be notified of the cost of the purchase in June 2018. Depending on the process chosen by your employer, you will either receive a letter from the CAAT Plan, or your employer HR will calculate the cost for you. The payment must be made in one lump sum.

Why does it have to be a lump sum? We were just out for 5 weeks. Is there no way to do a gradual purchase?

We only accept full payments for purchase costs. The cost does not change, and you can make the purchase at any time before you terminate or retire.

When will the strike service purchase show up on the CAAT Plan annual pension statement?

The purchase will appear on the annual statement in the year after you make the purchase.

How much notice must I give my employer of my intention to retire?

We recommend 3 months.

Will you be issuing regular annual CAAT Plan Pension statements?

Yes, by June 30th each year.

Questions about the cost of the purchase

If I purchase the strike service a year from now, will the cost to purchase change?

No. The cost does not change.

Benefit of making the purchase

Does the service purchase affect the date for earliest unreduced pension?

If you have already reached your earliest unreduced pension date, then the date will not change.  If you have not reached this date, and you do not purchase the strike your earliest unreduced date could be 5 weeks later than if you do make the purchase.

I am planning to retire as of June 2018. Do I need to buy back the strike time?.

Purchasing the strike is a member choice - additional service will always increase a member's monthly pension.  You can use the online estimator with your current service and carve out the strike period of .09616 years to compare the difference in your pension with and without the purchase.

I may retire about 5 years from now. How can I calculate the impact of the strike on my pension? What can I do to mitigate this?

The cost is 2 times your contributions for 5 weeks. For an estimate of the cost, refer to your most recent pay stub, calculate how much you contribute weekly, double it and multiple by 5.

What impact will it have on survivor benefits? Do survivors get the same amount as I would?

The strike has no impact on your survivor benefits. The eligible spouse is entitled to 60% of your lifetime pension at the date of your death.

Questions about highest average pensionable earnings

Are the years used for HAPE academic or calendar years?

Calendar years

To clarify, If I purchase the strike service, will my HAPE AND pensionable service for 2017 be equal to what they would have been if there had not been a strike, that is pensionable service = 1 year and HAPE: what I would have earned had there not been a strike?

Yes.

Is it possible that the strike will lower my HAPE because it happened in my last 5 years? 

Yes. Without the strike purchase, the HAPE could be slightly lower for those retiring in the next 5 years.

Are you aware if the Union is paying part of the strike purchase cost?

You will have to speak directly with your union local on cost sharing.

Previous Q&A

Why are the purchases starting in June?

The June start date enables the Plan to complete the purchases in the most efficient manner, and ensure consistent treatment for all affected members.

Note that the purchase date does not affect the cost of the purchase: it’s based on your earnings and contribution rates in effect at the start of the strike; so once calculated, it will never change.

If you’re retiring on or before June 30, 2018, you don’t have to wait to make the strike purchase.

How much does it cost to purchase the 2017 strike service?

The cost of the purchase is two times the contributions you would have made during the strike. The contributions are based on the salary you were earning at the beginning of the strike, and the contribution rates on that date. Once the purchase cost is calculated, it will never change.

The cost is 100% payable by you (the member), and the payment must be made in a lump sum. There is no employer contribution.

Refer to the cost chart below, to see examples of the purchase costs at different earnings levels.

I’m full-time. Should I make the purchase?

As a result of the 2017 strike, you will have 25 fewer days of pensionable service for 2017.

As a general rule, purchasing pensionable service will increase your pension, and could result in an earlier unreduced retirement date.

The chart below shows the cost to purchase the strike period at various earnings levels (for full-time members). It also provides general guidance on how much more pension you might get, in today’s dollars, by making the purchase. 

Cost chart – full-time members only

The chart below shows the estimated cost for a full-time member to purchase the strike period, along with an estimate of the increase in the monthly lifetime pension based on purchasing the strike. It shows the estimated cost of purchasing the strike period along with some general guidance on how much more pension you might get, in today’s dollars, by making the purchase. This will help you decide whether making a purchase is right for you.

How to use the table:

  • Find your earnings level in this chart in the first column. (The table shows salaries in $5,000 increments.)
  • The middle column shows the cost to purchase the strike. Note that you cannot purchase a portion of the strike period – it must be purchased in full.
  • The right column shows the estimated increase in lifetime pension with a strike purchase, in today’s dollars.

Annual salary

Estimated cost to purchase the 2017 strike period

Estimated increase in lifetime pension benefit with strike purchase

(full-time members only)

Monthly

Annual

$50,000

$1,077.00

$5.21

$62.52

$55,000

$1,185.00

$5.73

$68.76

$60,000

$1,325.00

$6.51

$78.12

$65,000

$1,467.00

$7.32

$87.84

$70,000

$1,610.00

$8.12

$97.44

$75,000

$1,752.00

$8.92

$107.04

$80,000

$1,894.00

$9.72

$116.64

$85,000

$2,037.00

$10.52

$126.24

$90,000

$2,179.00

$11.32

$135.84

$95,000

$2,321.00

$12.12

$145.44

$100,000

$2,463.00

$12.92

$155.04

$105,000

$2,606.00

$13.73

$164.76

$110,000

$2,748.00

$14.53

$174.36

$115,000

$2,890.00

$15.33

$183.96

$120,000

$3,033.00

$16.13

$193.56

 

Assumptions and Limitations

Please note:

  • The estimates do not assume any future increases in salary or YMPE
  • The estimates do not take into account any early start adjustments should you retire before reaching your earliest unreduced retirement date
  • The estimates do not take into account increased bridge benefits payable should you retire before age 65.

Will a service purchase affect my early unreduced retirement date? 

There is no one answer on whether your earliest unreduced retirement date will change as a result of the 2017 strike. It will depend on your age, amount of service you currently have and the type of unreduced pension you are on track to become eligible for.

Members become eligible for unreduced pension benefits at the earliest of three dates:

  • 60/20 rule: If you are age 60 or over with 20 or more years of pensionable service, you are eligible for an early unreduced pension.
  • 85 factor: If your age plus pensionable service equals 85 or more, you are eligible for an early-unreduced pension.
  • Age 65: If you do not meet the 60/20 rule or the 85 factor prior to age 65, you become eligible for a normal retirement pension, which is unreduced, at age 65.

For example, if you are age 59 with 20 years of pensionable service, you will still reach the 60/20 rule at age 60 regardless of whether you purchase the strike, as you would still have more than 20 years of service when you reach age 60.

However, if you are age 61 with 19 years of service and don’t make the strike purchase, it may take you an extra month to reach 20 years of pensionable service to achieve both requirements under the 60/20 rule.

Similarly, if you expect to reach the 85 factor first, your early unreduced retirement date could be delayed a month depending on when you were born. This is because the Plan uses your exact age as of the end of your month of retirement, along with your pensionable service, to determine whether you have met the 85 factor.

Will a service purchase affect my Highest Average Pensionable Earnings (HAPE)?

If you are more than five years away from retiring or terminating, then the strike is unlikely to affect your HAPE. If you are within five years of retiring or terminating then the strike could impact your HAPE. HAPE is an average calculated over your highest consecutive five years of earnings. If that highest five year earnings period is interrupted by the five weeks of the strike, the Plan has to calculate your average by going back and bringing into this average five weeks’ worth of earlier (and likely lower) earnings. Without a strike purchase, this could bring your overall HAPE down.

For example, if you were to retire on June 30, 2018 and you are at your highest earnings, your HAPE calculation would normally be based on your actual earnings from July 1, 2013 to June 30, 2018. If you do not purchase the 2017 strike period, your HAPE would still be based on five years’ worth of earnings, but would include the five weeks prior to July 1, 2013. If the earnings in that earlier five week period are lower than what your earnings would have been during the 2017 strike, your HAPE will be reduced. In this scenario, purchasing the strike period will restore your HAPE.

However, if you are more than five years away from retiring or terminating and your earnings increase or remain the same, then your HAPE will be based on that future five-year period and will not be impacted by the 2017 strike. For example, if your retire June 30, 2023 and your earnings are at their highest over the preceding five years, your HAPE calculation will be based on the period July 1, 2018 to June 1, 2023. As a result, purchasing the strike period will impact your service, but will not impact your HAPE. 

I’m retiring on or before June 30, 2018 - do I have to wait for the purchase window?

You don’t have to wait for the special process window to purchase the strike. If you are retiring on or before June 30, 2018 and you want to make the strike or any other purchases, the purchase must be completed before you retire. You should notify your employer as soon as possible that you wish to make the purchase. This way, we will be able to get everything completed before you retire. If your Pension Application has already been submitted to the Plan, we will contact you.

What if I terminate my employment on or before June 30, 2018?

You don’t have to wait for the special process strike purchase window. If your employment terminates, you can still make the strike purchase, but you must do so within 30 days of your termination. Talk to your employer as soon as possible to start the process. 

 I’m part-time and part of the OPSEU bargaining unit that participated in the strike. Will I be able to make the purchase?

Yes. Your purchase will use the same process as full-time striking members at your college.

What is the process to make a purchase? 

There will be two different processes, depending on your employer’s payroll and reporting capabilities and preference. In either process, the purchases will start in June, 2018.

Mail-out option

The CAAT Plan will calculate the cost of the strike purchase based on data submitted by the employers. Starting in June 2018 the CAAT Plan will mail each member a letter with the cost of the purchase and a Strike Purchase form.

  • The Plan will mail a strike purchase quote to each member at their home address.
  • To make the purchase, the member completes the Strike Purchase form and returns it to the CAAT Plan with the cheque for the entire purchase amount.
  • A past service pension adjustment (PSPA) will be required before the purchase can be processed. The Plan will arrange to have the PSPA approved with Canada Revenue Agency (CRA). If the PSPA is approved, the Plan will complete the process, including issuing tax receipts.
  • If the PSPA is denied, CRA will contact the member directly.
  • Members can make the payment using cash or RRSP transfer
  • Once the purchase is complete, the member will receive confirmation from the CAAT Pension Plan.
  • The member’s next Annual Statement will show the pension with the service purchase included.

Form-based option

  • The employer will calculate the cost of the purchase using a 2017 Strike Purchase form, which the member must sign.
  • The employer can submit the forms starting in June 2018, along with the member’s payment.
  • A past service pension adjustment (PSPA) approval will be required before the purchase can be processed. The Plan will arrange this approval with Canada Revenue Agency (CRA). If the PSPA is approved, the Plan will complete the process, including issuing tax receipts.
    • If the PSPA is denied, CRA will contact the member directly.
    • Members can make the payment using cash or RRSP transfer.

Is a service purchase right for you?

Only you can decide if a service purchase is a good idea for you, and if it’s a cost effective way to increase your pension. You'll need to know the cost of buying back the service, and how much larger your pension could be with the additional service, in order to make an informed decision.

In many cases, it's worth doing. But each of us has different plans for what we will do in our retirement, and how our finances can support our goals. You are the best judge of what is appropriate for you.

What is a service purchase worth to me?

Any gaps in your pensionable service, such as a period of unpaid leave, can be purchased now, to result in a higher pension when the time comes to retire. Pensionable service is one of the factors used to calculate your pension – the more pensionable service you have, the greater your retirement pension will be. By contributing to your pension during your leave, or upon your return to work, you can accrue pensionable service for the period of your absence.

The cost of buying back a leave will depend on when you choose to purchase the service. If you buy the service within 6 months of your leave, the cost is generally 2 times your contributions. If you wait longer than 6 months, the cost is the greater of 2 times your contributions (based on the rates at the time of the purchase) or “actuarial” cost, which means the true cost of adding that amount of service to your pension. Generally, the longer you wait, the more the leave costs.

Purchasing service is an important way to maximize your retirement income, and possibly retire earlier with an unreduced pension, so it may be worth it for you to consider a buyback as soon as possible.

What kinds of service can I purchase?

Identify your situation from the possibilities below to see your options.

I took time off from work without pay.

You can buy this service either with cash or through RRSP transfer. If you make the purchase within six months of the leave's end, you'll pay two times your regular contributions (there is no contribution from your employer) based on the contribution rates in effect at the time of the leave, and the deemed earnings during the leave period.

If you wait until after six months, you'll be paying the higher of the full actuarial cost or two times regular contributions, based on the contribution rates in effect at the time of purchase. Once you sign the purchase form, you will have 90 days to make full payment (in cash or through RRSP transfer) at the quoted cost. If the payment is made after 90 days, the amount owing will be recalculated.

 

Download the Service Purchase Timeline to get started

The process depends on the timing or your purchase:

  1. Unpaid Leave of Absence purchase - within 6 months from end of leave (PDF)
  2. Unpaid Leave of Absence - after 6 months from end of leave (PDF)
I worked full time on a contract for a CAAT Plan participating employer before I became a Plan member.

"Pre-enrolment service" is a special category of employment contract (full time Sessional, Appendix D, or Full-time contract) that you can purchase in respect of full-time service with a participating employer prior to January 1, 2014, provided you became a regular (i.e. non-contract) full-time employee with no break in employment. Your employer will pay the employer's share of contributions. Your current employer will make the payment, based on current earnings, regardless of which participating employer you were at when you acquired the service.

You can make your portion of the payment either with cash or through RRSP transfer. If you buy the service within 6 months of becoming a regular full-time employee, you'll pay regular contributions based on your salary at the time you choose the purchase. If six months have passed, you’ll pay the higher of 50% of the actuarial cost, with your employer paying an equal amount, or your share of the contributions, based on the contribution rates in effect at the time of the purchase.

Once you sign the purchase form, you'll have 90 days to make full payment at the quoted cost. If the payment is made after 90 days, the amount owing will be recalculated.

Download the Service Purchase Timeline to get started (PDF)

I worked for a CAAT Plan employer before I joined the Plan

This new category of "pre-enrolment, full cost" service allows you to purchase any and all time that you worked for a CAAT Plan employer before you joined the Plan as a member. This includes any other than regular full-time employment. You pay 100% of the actuarial cost of the purchase.

Download the Service Purchase Timeline to get started (PDF)

I took pregnancy, parental or adoption leave resulting from the birth or adoption of a child.

You can buy this service through regular deductions by your employer from Supplementary Unemployment Benefit (SUB) Plan payments you receive during the leave period.

Or, buy it once you return to work, with cash or through RRSP transfer.

If you buy it within 6 months of returning to work, the cost will be regular contributions based on the contribution rates in effect at the time of the leave, and the deemed earnings during the leave period. Your employer will match these contributions.

If six months have passed, you'll pay the higher of the full actuarial cost, with no employer contribution, or two times regular contributions, based on the contribution rates in effect at the time of the purchase.

Once you sign the purchase form, you'll have 90 days to make full payment at the quoted cost. If the payment is made after 90 days, the amount owing will be recalculated.

How to arrange your purchase

Your employer will provide you with a Pregnancy/Adoption or Parental Leave form that you will have to complete and sign. It is normally to your advantage to purchase these leaves, however if you decide against it, you must complete the waiver section of the form and return it to your employer.

If you are entitled to receive SUB Plan payments from your employer, your contributions may be deducted directly from these payments. You can continue to accumulate pensionable service and benefit from the matching contributions your employer makes during your leave.

If you are not entitled to SUB Plan payments, or you do not wish to have contributions deducted from your payments, you can make a "buyback" - a lump sum payment of the entire amount of your contributions - upon your return to work. For buybacks made within six months of your return to work, your employer matches your contributions. However if the payment is not made within six months, the cost will be recalculated and you have to pay the higher of the full actuarial value of the service with no contributions from your employer, or the cost of 2 times regular contributions, based on the contribution rates in effect at the time of the purchase.

Download the Service Purchase Timeline to get started

The process depends on the timing of your purchase:

  1. Pregnancy, Adoption or Parental Leave Service Purchase – within 6 months (PDF)
  2. Pregnancy, Adoption or Parental Leave Service Purchase – after 6 months (PDF)

I terminated before vesting and took a refund of my contributions.

Please click here to learn more about your termination options.

If you return to work with an employer, you can purchase the service from your previous membership. The cost to you is the full actuarial cost.

Once you sign the purchase form, you will have 90 days to make full payment (with cash or through RRSP transfer) at the quoted cost. If the payment is made after 90 days, the amount owing will be recalculated.

Download the Service Purchase Timeline to get started (PDF)

I transferred the commuted value of my pension out of the Plan when I left.

Technical change to service purchase methodology ensures consistent treatment for all members. Read more here.

If you return to work with an employer, you can purchase the service from your previous period of membership after you rejoin the Plan. The cost to you is the full actuarial cost, and there is no employer contribution.

Once you sign the purchase form, you will have 90 days to make full payment at the quoted cost. If the payment is made after 90 days, the amount owing will be recalculated.

If you are buying service accrued before 1992, payment for it must come from a transfer from an RRSP or Deferred Profit Sharing Plan. If you are buying service accrued after 1991, payment can generally be with cash or through RRSP transfer.

Download the Service Purchase Timeline to get started (PDF)

I left my job and filed a grievance. I have returned to work.

If before your grievance was resolved, you had your contributions refunded or the commuted value of your pension benefit was transferred out of the Plan, you can buy back the value of the service by repaying any amounts you received or transferred out when you return to work. The Plan will calculate the cost, which will include interest charges. If this cost is more than the current worth of the amount you received, due to investment fees or losses, you are responsible for the difference.

You will have the choice of paying with cash or through RRSP transfer, unless you are buying back service accrued before 1992. In this case, payment must come from an RRSP or another Registered Pension Plan.

 

I was laid off with recall rights and have been recalled.

While waiting to be recalled, if you did not have your contributions refunded or transfer the commuted value of your pension benefit out of the plan, you can buy the layoff period as an unpaid leave of absence when you return to work. You can use either cash or an RRSP transfer.

If you make the purchase within six months of the end of the layoff period, you'll pay two times your regular contributions based on your salary at the time you choose the purchase. If you wait until after six months, you'll be paying the higher of 2 times your contributions, based on the contribution rate at the time of the purchase, or the actuarial cost. Once you sign the purchase form, you will have 90 days to make full payment at the quoted cost. If the payment is made after 90 days, the amount owing will be recalculated.

 

I had a work stoppage relating to collective bargaining.

For any strike period that occurs after January 1, 2018, the cost of purchasing the service will depend on when the purchase is made.
Purchase within six months from end of strike: Member pays two times contributions based on the salary at the start of the work stoppage and the contribution rates in effect during the strike.
Purchase after six months from end of the strike: Member pays the higher of two times contributions, based on the rates in effect at the time of the purchase, or the actuarial cost.
Read the announcement related to the 2017 faculty strike. 

Completing a purchase

The cost of a purchase

For some buybacks, the cost is equal to the contributions you would have made if you were working. For others, the cost will be two times your contributions, reflecting your share and your employer’s share.

In most cases, usually after a six-month deadline for choosing to buy service has passed, the cost will be the higher of the contributions cost, based on current contribution rates, or the current actuarial cost. This is the cost of the increased pension relating to the additional service - the value needed today to pay the pension in the future.

However, as your age, earnings and years of membership increase, so will the cost of the buyback. If you don't meet the original payment deadlines, you may also find that the cost that you've been quoted will be recalculated - this is because the combination of your age, earnings and years of membership are increasing all the time.

How to pay for your purchase

With a couple of exceptions, you are responsible for the full cost of the purchase, with no contribution from your employer. Remember that during your regular active service, your employer contributes the same amount as you.

In all cases, payment will be in a lump sum with no interest charged. You may have the choice of paying by cash, or by a transfer from your RRSP (there are situations where you could be restricted to one or the other).

You can choose to make the purchase up until you retire or leave your job.

Tax Implications

In the same way your regular CAAT Plan contributions are tax deductible, a buyback purchase will be deductible if you pay in cash and have RRSP contribution room. This "room" for the current year is determined by your Pension Adjustment (PA) amount - that is, the deemed value, calculated by your employer, of the pension benefit you earned in the previous year.

A Past Service Pension Adjustment (PSPA) is the deemed value of the additional benefit created by the purchase - it reduces your RRSP contribution room. To create room for the purchase within your RRSP, you may need to withdraw some funds from it, which will be considered taxable income in the year they are withdrawn, or you may need to transfer funds from your RRSP to purchase the leave.

At the same time, keep in mind that a buyback may affect your PA amount. If you pay for a leave of absence before April 30 of the year after the year the leave ends, it will be included in the PA reported for the period.

If you choose to buy the leave after April 30 of the following year, we will have to calculate a PSPA and send it for approval to the Canada Revenue Agency before the purchase can be completed.

Note that PAs have been used since 1990. These calculations are not required for service periods before that year. However, there are some other tax issues, such as the pre-1990 deductibility limit of $3,500, which you would need to consider.

Federal law places a maximum on the amount of post-1990 unpaid leaves of absence you can purchase. The total amount is 5 years, plus up to 12 months for each pregnancy or parental leave to a maximum of 3 additional years.

Your decision to purchase service will be affected by the issues of tax deductibility, PAs and the possibility of PSPAs. You'll need to consult with your employer and we suggest you seek independent advice from your financial advisor.