Having or adopting a child? Maximize your pension
Having or adopting a child is a life‐changing event that brings new responsibilities. It’s a good time to consider some work and pension‐related issues.
Top up your pension
When you take time off work to look after your child, you won't be receiving your regular salary or contributing to your pension. This will affect your current income and your pension when you retire. Remember, your pension is calculated based on your years of pensionable service and the average of your five highest years of salary. The more pensionable service you have, the greater your pension.
Although you normally accumulate pensionable service by working and contributing to BC’s College Pension Plan, you can also buy service for an approved maternity, parental or adoption leave under the Employment Standards Act (ESA).
When you apply to buy service, the cost is calculated using the length of your leave, current employee and employer contribution rates, and your current full-time-equivalent salary. You’ll be responsible for paying your employee share, and your employer will pay its share.
You must meet pension plan rules, criteria and timelines to buy service. The Income Tax Act (ITA) has its own rules as well. You can find out more about the ITA rules on the Government of Canada website.
If you wish to continue making contributions while on an ESA leave, you must apply within 30 days of starting your leave. Download the purchase of service application package on the Submit a form to buy service page and fill out the Purchase of Service Application.
If you are making a lump-sum payment, you must apply to buy service for a leave within five years of the end of that leave or within 30 days of ending your job with the employer that granted the leave, whichever comes first. Sign in to My Account and use the purchase cost estimator to see how much buying your service might cost.
Returning to work part time?
If you return to work part time after a leave, you'll start contributing to the plan again. Your pension contributions and pensionable service will be adjusted to reflect your part-time salary.
Not coming back to work?
If you decide not to return to work and want to buy service for the period of your leave of absence, you must apply within 30 days of ending your job with the employer that granted the leave.
Protecting your beneficiaries
Your pension may provide some financial security for your family when you die. If you have a spouse, they are automatically your beneficiary and will receive your pension benefit. If you have a child, you may want to name them as an alternate beneficiary in case your spouse dies or to provide for your child on your death. You may be able to name alternate beneficiaries through My Account.
If you have a spouse and wish to name your child as a primary beneficiary, your spouse will have to waive their right as beneficiary to your pension. If your child is under age 19, you can name a trustee to manage and distribute your pension benefit on your behalf.
You may wish to speak with a legal professional about your will, your pension options and how to best protect the financial security of your family.
Planning for your new future
Having a child is one of life's most significant and exciting events. As with other major changes in your life, it’s wise to take a few moments to review your financial situation; you may wish to consult an independent financial advisor about your options.