Buying past service

Learn about buying service for eligible periods of employment that occurred before you or your employer joined the College Pension Plan


Understanding the cost

The cost of buying past service will typically be higher than other types of service available to purchase such as general or parental leaves. The BC Pension Corporation, following Standards of Practice prescribed by the Canadian Institute of Actuaries and approved by the College Pension Board of Trustees, calculates this cost.  The cost of buying past service is paid for solely by the member. 

How the cost is calculated

The cost to buy past service depends on:

  • Your current age
  • Your salary at the time you apply to buy the service
  • The amount the plan needs today to cover the future costs of the increase to your pension

What’s the cost?

Use the charts below to get a quick estimate based on your age and salary.

Cost to buy one year of past service from January 2016 to present ($)

  Member's current age
Current
salary ($)		 30 35 40 45 50 55 60 65 70
70,000 10,774 11,105 11,948 13,260 14,976 18,545 20,865 22,287 19,705
90,000 13,852 14,278 15,362 17,049 19,255 23,844 26,826 28,655 25,336
110,000 16,931 17,451 18,776 20,837 25,533 29,143 32,788 35,023 30,966
130,000 20,009 20,624 22,190 24,626 27,812 34,441 38,749 41,390 36,596
150,000 23,087 23,796 25,604 28,415 32,091 39,740 44,711 47,758 42,226
170,000 26,165 26,969 29,018 32,203 36,370 45,039 50,672 54,126 47,856
190,000 29,244 30,142 32,432 35,992 40,648 50,337 56,634 60,494 53,486
250,000 38,478 39,661 42,673 47,358 53,485 66,233 74,518 79,597 70,377
300,000 46,174 47,593 51,208 56,829 64,182 79,480 89,422 95,516 84,452

 

Cost to buy one year of past service from before January 2016 ($)

  Member's current age
Current
salary ($)		 30 35 40 45 50 55 60 65 70
70,000 12,227 12,490 13,353 14,759 16,642 20,705 21,949 19,106 16,893
90,000 15,965 16,343 17,499 19,360 21,821 27,139 28,962 25,474 22,523
110,000 19,703 20,196 21,644 23,960 27,017 33,574 35,976 31,842 28,154
130,000 23,441 24,049 25,790 28,561 32,212 40,008 42,989 38,210 33,784
150,000 27,179 27,901 29,935 33,161 37,408 46,442 50,003 44,577 39,414
170,000 30,916 31,754 34,080 37,761 42,604 52,876 57,016 50,945 45,044
190,000 34,654 35,607 38,226 42,362 47,799 59,310 64,029 57,313 50,674
250,000 45,868 47,165 50,662 56,163 63,386 78,612 85,070 76,416 67,565
300,000 55,213 56,797 61,025 67,664 76,375 94,697 102,604 92,335 81,640

If you want to continue the process and find out exactly how much it will cost to buy your past service, you must complete the Past Service Purchase Application. The personalized Purchase Cost Estimator in My Account is not available for past service estimates.

If eligible, you’ll receive a Statement of Cost that includes the total cost to buy that service, the estimated increase to your pension, and next steps

If you include an approximate amount of money you plan to use to buy service in Part A of the application, you’ll also receive an estimate of how that amount could increase your pension.

Paying for past service

You may use a combination of the following to pay for your past service:

  • RRSP or locked-in retirement account (LIRA) funds
  • Cash (electronic funds transfer, draft, cheque, or money order)
  • Funds from a former registered pension plan (RPP)

If your funds from the former RPP aren’t enough to cover the full period you want to buy, you can use any combination of sources to pay the difference. This difference, called a shortfall, is due to variation between the former RPP and the College Pension Plan rules, your salary and age. If you choose not to buy the full period, the service will be allocated starting with the most recent period and working backward.

We accept direct payments from your former RPP if it’s a DC plan or SMEP. If it’s a DB plan, the funds must first be transferred through another account, such as an RRSP.

If your funds are still with your former RPP, do not move them until you’re ready to finalize your purchase.

Financial and tax implications

  • Buying past service increases the value of your pension.
  • A change in pension value results in a past service pension adjustment (PSPA) which may affect your RRSP contribution room.
  • After we receive your payment, the Canada Revenue Agency may need to approve the PSPA before the purchase can be finalized.
  • For more information, go to Buying service and RRSP contribution room

You should consider not just the cost of buying service, but whether the purchase makes financial sense for your situation. Consult an independent financial advisor to better understand the cost and potential lifetime benefit of buying service.


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Eligibility for past service