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Buying Back Service Prior to Retirement

Plan concerned: The RREGOP

 

Here are answers to questions often asked by people who are planning their retirement.

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Benefits of Buying Back Service

Can I enhance the advantages provided under my public-sector pension plan?

Your retirement pension is calculated, among other things, on the basis of the number of years of service credited to your account at the time of your retirement. Therefore, if you are entitled to buy back certain periods of service or absence without pay, you could have them credited to your pension plan. This would increase the amount of your retirement pension. It is important for you to know that only the buy-back of certain periods of service or absence can allow you to retire earlier.

Note: If you have accrued close to 40 years of credited service as at 31 December 2018, you should evaluate if it would be worthwhile to buy back service. For further information in this regard, contact the public-sector pension plan administrator at your current workplace, generally in the human resources department.

Are purchased years of service considered years of membership in my pension plan?

Yes. The purchased years are used both to determine your eligibility to benefits and to calculate the amount of those benefits.

 

Most Common Types of Buy-Backs

What are the most common types of buy-backs?

They mainly concern the following periods of service or absence:

  • Years of service accrued as a casual employee for an employer subject to the plan:
    • from 1 July 1973 to 31 December 1986, for casual employees on a recall list in the health and social services sector
    • from 1 July 1973 to 31 December 1987, for all other casual employees in the education, public service and health and social services sectors.

Since 1 January 1988, all casual employees in the education, public service and health and social services sectors working on a part-time or full-time basis have been covered by a public-sector pension plan. This means that it is no longer necessary for those employees to buy back periods of service accrued since that date because their contributions have been deducted automatically under their plan.

  • Full-time or part-time absences without pay that began after you became a member of the PPMP and that meet all of the following conditions:
    • it must be provided for in your conditions of employment
    • it must be authorized by your employer, except for absences resulting from a strike, a lockout or a disciplinary suspension
    • you must not have received any remuneration during the period in question
    • you would or could have worked had it not been for the absence.

 

  • Maternity leaves that began prior to 1 January 1989 or that were underway on that date. Different conditions apply depending on the periods.

 

For more information, consult the pamphlet entitled Buy-Backs.

Part-time Work

If I work part-time, can I buy back the days during which I do not work?

No. In order to buy back a period of service or a period of absence without pay, we must consider that you have a covered work for your regulated employer during that period.

When you work part-time, you work for your employer only on the days included in your work schedule. Therefore, you cannot buy back the other days.

Example:

Jerry holds a part-time job where he works 3 days a week (Mondays, Tuesdays and Wednesdays). Since he works for his employer only for those 3 days, he cannot buy back the other 2 days (Thursdays and Fridays) because they are not included in his work schedule.

Note that if Jerry were absent without pay during the days included in his work schedule (Mondays, Tuesdays or Wednesdays), he would have the right to buy back those days of absence without pay.

 

How to buy back service

What do I have to do to buy back years of service?

You must send the form entitled Application for a buy-back of one or more periods of work This link will open in a new window. (RSP-727A-WRK) to Retraite Québec, along with the required supporting documents, if any, while you are still a member of your pension plan.

If you have questions regarding your situation, you can contact:

  • the pension plan administrator in your human resources department
  • your union, or your professional or managers’ association
  • Retraite Québec’s Centre des relations avec la clientèle.

Once Retraite Québec receives your buy-back application, we will contact your current employer and the employer or employers concerned by the periods to be bought back in order to obtain the information required to process your application.

If the study of your file shows that the periods can indeed be bought back, we will send you a buy-back proposal, which you are free to accept, in whole or in part, or reject. The proposal will indicate the cost and payment terms of the buy-back, and will be valid for 60 days.

Please note that if we do not receive your acceptance of the buy-back proposal within 60 days from the date of the proposal, your buy-back application will be considered to never have been made.

Should I buy back all of my periods of absence without pay?

No. Under the provisions of your plan, up to 90 days (called 90-day bank) can be automatically added at no cost to your years of service to offset certain periods of absence free of charge. The days in your 90-day bank are automatically credited when Retraite Québec determines whether you are entitled to a retirement pension. It provides the same advantages as a buy-back.


Periods of absence completed at no cost by the 90-day bank

Before 1 January 2011

After 31 December 2010

Every period of absence without pay

Every period of absence without pay related to a parental leave

Note: The 90-day bank is covered by the following plans: the RREGOP, PPMP, RPSO, PPPOCS and PPCT.

When Retraite Québec processes your buy-back application, it will deduct the number of your days of absence that can be offset at no cost by the 90-day bank from the number of days of service corresponding to the period concerned by your application. It will prevent you from paying to buy back the days of absence that could be credited to you at no cost. However, if you would rather buy back all your days of absence, which means you would like that the 90-day bank not apply while processing your application, it must be specified in the space provided for that purpose in the form entitled Application for a buy-back of one or more periods of absence This link will open in a new window. (RSP-727A-ABS).

The days credited from the 90-day bank will be fully credited and included in the calculation of your pension. The days of absence that ended before 1987 will also be taken into account to determine your eligibility for benefits before 1987. Days of absence since 1987 have already been credited for eligibility purposes.

Furthermore, the parental leaves that you can buy back must have been taken while you were a member of the RREGOP or the PPMP.

Since I started working, I have taken a total of 120 days of absence without pay. Since you will credit me with 90 days at no cost when you calculate my pension, can I only buy back the remaining 30 days?

Yes. Under the provisions of your plan, up to 90 days (called 90-day bank) can be automatically added at no cost to your years of service to offset certain periods of absence free of charge. Therefore, if you file your buy-back application and you have 120 days to be bought back, we subtract a maximum of 90 days from those days to avoid buying back days that you do not need to. You can buy back the remaining 30 days that will be indicated in the buy-back proposal that Retraite Québec will send you.

Cost of Buying Back Service

How much does a buy-back of service cost?

It is impossible to give a general answer to this question as the cost varies according to the type of buy-back, the period to be purchased and the age and salary of the person on the date we receive the application for buy-back.

However, you can quickly and easily obtain the approximate cost of the buy-back you are contemplating using the following tool:


 

Calculator

Use this tool to estimate the cost of buying back service.

 

Useful forms

To apply for a buy-back, send us one of the following two forms, or both, according to your situation:

 

Useful Links

 

To Learn More About Your Public-Sector Pension Plan

  • The public sector pension plans > The RREGOP
  • Documentation > For members of public sector pension plan > Buy-backs
  • Life events > Retirement > You are a member of the RREGOP and are planning your retirement > Basic pension
  • Life events > Retirement > You are a member of the RREGOP and are planning your retirement > Pension credits and paid-up annuities
  • Life events > Retirement > You are a member of the RREGOP and are planning your retirement > Deciding to retire
  • Life events > Absences