Purchase of service

If an employee is an active member of the Public Service Pension Plan and meet the eligibility criteria they can purchase service for periods when they didn’t make contributions to increase their pension.

There are two types of service available:

• When they were on a leave of absence without pay
• For periods of non-contributory service, such as time limited employment (co-op, articling student or internship programs) or auxiliary employment

On this page

• Purchasing a leave of absence
• Non-contributory service
• Transferring between plan employers
• Cost to purchase service
• How to apply
• Payment
• Tax implications

Purchasing a leave of absence

Employees enrolled in the pension plan prior to taking the leave of absence may be eligible to apply to purchase that leave.

There are two main categories of leave: Employment Standards Act (ESA) leave and general leave.

Employment Standards Act (ESA) leave is cost-shared between the employer and the employee:

• Maternity and parental leave
• Compassionate care leave
• Leave respecting disappearance of child
• Leave respecting death of child
• Critical illness or injury leave (Family Caregiver benefit for adults/children)
• Leave respecting domestic or sexual violence

General leave is not cost shared, and the employee is responsible for the full cost of the purchasing leave (for example: general leave of absence over 30 days, periods of reduced work schedule)

NOTE: If general leave is 30 days or less, the leave is cost shared between the employer and the employee.

Continuous Contribution

Effective May 1, 2020, an employee on an Employment Standards Act (ESA) leave has the option to make continuous pension contributions monthly throughout their leave.

Employees must decide within the first 30 days of the leave and submit a completed Purchase of Service Application (PDF, 1.3MB) through an AskMyHR service request. Use the categories Myself > Benefits > Pension/Purchase of Service

The employer will complete Part B and send the application form to Pension Corporation for processing. The Pension Corporation will send the employee a statement of cost monthly for their portion of the contribution.

If payment is missed at any time during the leave, then the continuous contribution option ends but employees get to keep the service that has already been purchased.

At the end of the leave, employees can purchase the remaining service as a lump sum.

There is still the option to purchase the service within five years of the end of the leave period as a lump sum payment.

Purchasing leave and deadlines

Employees may be able to purchase a leave of absence if:

• They were an active member when they took the leave
• They apply before their employment ends with the employer with whom the leave occurred
• The leave ended on or after April 1, 2002
• They apply within 5 years of the end of the leave

Non-contributory service

Non-contributory service is when employees work for a Public Service Pension Plan employer but do not make pension contributions.

The employer will pay the employer portion of the contributions if:

• The service was with the current employer
• The service immediately preceded the date they began to contribute to the pension plan
• There has been no termination between the period being purchased and the date of application

If eligible, employees can purchase other time-limited, non-contributory service periods such as co-op work terms, personal service contracts, or articling or internship programs, but they must pay both the employee and employer portions.

Purchasing non-contributory service

Employees may be able to purchase non-contributory service if:

• They are an active plan member, which means they are enrolled in the plan and making contributions or
• They are on an approved leave of absence or receiving long term disability benefits
• The service was with their current Public Service Pension Plan employer

• They cannot purchase the service if they waived enrolment under the enrolment provisions on or after April 1, 2000

They must apply within five years of their first contribution to the plan or before their employment terminates, whichever comes first. If their employment ends after becoming a member and then is re-hired, they cannot buy service that occurred before the termination.

Transferring between plan employers

If the service an employee wanted to purchase was with another Public Service Pension Plan employer, that employer decides whether or not to pay their contributions.

If they end their employment with the province to work for another plan employer, they are responsible for both the employee and employer contributions.

Cost to purchase service

The cost is based on their full-time equivalent salary and the employee and employer contribution rates on the date they apply. If they apply to make continuous pension contributions during an ESA leave, the cost is based on their full-time equivalent salary and the employee contributions had they been at work. They can estimate the cost and the potential increase to their pension by logging into MyAccount.

How to apply

Complete a Purchase of Service Application (PDF, 1.3MB), then scan and submit it through an AskMyHR (IDIR restricted) service request. Use the categories Myself > Benefits > Pension / Purchase of Service. 

They will receive a Statement of Cost from the Public Service Pension Plan electronically if they registered for MyAccount (please ensure to check the junk/spam folder for an email from DoNotReply@pensionsbc.ca with a subject line starting with My Account: [subject]) or, via mail if not registered, within a few months with options for payment.

Payment

Employees are responsible for paying the BC Pension Corporation the full amount by the due date listed on their statement. They can pay by:

• Cash - cheque, money order, bank draft, electronic funds transfer (EFT)
• Direct transfer from an existing RRSP in their name* 
• A combination of the two above

* If they transfer RRSP funds from a financial institution, confirm that the  transfer is the exact amount owed. Make sure service fees are not deducted from the payment.

Tax implications

Purchasing a leave increases the employees’ pension and affects their taxes. They may wish to speak with a qualified financial planner before deciding to purchase service.