OPB News for Members

Pension credit is measured in years and months and determines the value of your pension and eligibility for early retirement. The most common way to increase the value of your pension is by working and contributing to the Public Service Pension Plan (PSPP) to earn pension credit. However, it isn’t the only way.

PSPP members Luis and Sarah both experienced how purchasing pension credit based on periods of eligible past service (known as a buyback) provided them with financial advantages. When you complete a buyback, you increase your pension credit.

There are times in your career that may qualify you to buy back pension credit. Examples include purchasing pension credit based on service with a past employer that contributes to the PSPP, a leave of absence with pay (e.g., pregnancy or parental leave), or even previous work with an employer where you participated in another registered pension plan.

A buyback could mean a higher pension, an earlier retirement date or, for some members, eligibility for insured benefits in retirement. Sarah contacted OPB’s Client Care Centre to discuss her buyback and found out she could retire five years earlier. This had a huge impact on her life.

Timing is a key consideration in buybacks. The longer you wait to purchase a buyback, the more likely the cost will increase. Buybacks are time sensitive, and some types of buybacks have lower costing when you apply within a 24-month window.

In Luis’s case, he decided to move forward with his buyback. After speaking with OPB Advisor Kasia, he learned of the benefits of paying for it through different methods that would benefit him financially. This valuable information helped him make the right decision.

“I am thrilled with what I did, this is a dream come true. Thank you, I can’t express how grateful I am,” said Luis. “In old age I don’t have to worry where money comes from.”

Every member has unique circumstances, so do your research and ask as many questions of OPB as you need to. When it comes to paying for your buyback, there are many flexible payment options. If you decide to purchase your buyback from savings using a personal cheque or through payroll deductions, there are tax benefits because these payments are deductible in the year they are made. The payroll deduction option allows you to spread the cost of your buyback over up to 10 years at a very reasonable interest rate. However, if you use registered funds (e.g., RRSP/LIRA) to purchase your buyback, it will not be eligible for tax deduction because you already received tax deductibility when you contributed to a registered account.

Luis decided on payroll deductions to cover the cost of his buy back. This means that Luis will be able to deduct his pension cost in each year he makes a payment. He learned of this option and its benefits through a one-on-one meeting with an OPB Advisor.

“Initially, I was going to use money in RRSPs to buy back service. I wasn’t aware that buying back the service through payroll deductions would save me so much money,” said Luis. “I anticipate saving thousands of dollars due to tax deductibility.”

Whether you pay for a buyback through payroll deduction or a personal cheque (money that is not already in a registered tax savings account such as an RRSP or LIRA) you may be able to claim these payments as a tax deduction. Your buyback may be limited based on your RRSP contribution room and other considerations such as how you will pay for it. Paying for part or all of your buyback with a cheque or payroll deductions may not always be an option. When you apply for a buyback, we will calculate a Past Service Pension Adjustment (PSPA) to advise you on the impact and assist you with your decision.

OPB helped Luis and Sarah in completing their buybacks and can assist you as well. To apply for a buyback, visit OPB.ca. If you have multiple buyback opportunities, please fill out one application per buyback, and send them to us with the required supporting documents outlined on the second page of the application.

Check out Understanding Your Pension Credit (PDF). Get your first estimate by using our buyback estimator found in e-services under “My Planning.” Our Client Care Centre is also available to assist with any buyback questions.

*Editor’s note, names of members have been changed to protect their privacy.

Don’t let retirement planning get you down. We’re here to help take the stress out of retirement planning so that you can start retirement dreaming.

OPB has the tools and resources available to members to help with the financial part of retirement planning. Our comprehensive and enhanced Retirement Planner builds on pension estimates from your Annual Pension Statement (APS) or the Pension Estimator. Together with your other sources of income and savings (Canada Pension Plan and Old Age Security, RRSPs, and TFSAs), the planner provides you with a detailed year-by-year projection of your total estimated retirement income both before and after tax.

Our Retirement Planner is an incredibly useful tool that can help you picture exactly how to achieve the retirement life you want and deserve. Log in to e-services(opens in a new tab) to create your plan.

Before you start

For an efficient planning experience, we recommend that you collect the information below for you and your spouse (if applicable) before you start.

• Personal information – Your date of birth, expected retirement date, and the province you plan to live in during retirement
• Income – Your current gross income (before tax) and net income (after tax)
• Savings – Statements or estimates from your financial institution(s), including OPB. Include your PSPP estimate, any other Defined Benefit pension you may have, government pensions, such as Canada Pension Plan (CPP), Registered Retirement Savings Plan (RRSP), Locked-In Retirement Account (LIRA), Tax Free Savings Account (TFSA) and general personal savings or investment accounts that you plan to use for retirement income.
• Expenses – Your total cost of living including contributions to savings and investments

When we find ourselves dealing with tough and unprecedented economic challenges, it’s helpful to adjust how we spend and save to ensure the best financial outcomes for us and our families.

For some of us, this can be easier said than done. Sometimes finding opportunities to save money can seem more realistic in theory than in practice. But rest assured, there are some quick and easy ways to save during tough economic times.

Here are a few easy tips:

Plan your meals in advance

Meal planning for a set period (whether for a week or a month) can be an incredibly effective way of saving money. Not only does it help you decrease the amount you spend on dining-out, food delivery or expensive meal kits, but it also helps you create, and stick to, a set budgeted amount of groceries.

Consider paying cash where you can

The less you use your credit card, the less you have to worry about incurring high-interest rate expenses. Also, by bringing cash with you when you leave the house and committing to only spending what you have, you avoid spending over budget or making expensive impulse buys.

Review recurring charges

By reviewing the membership fees and subscriptions that are automatically debited from your account, you can ensure that you are not allocating funds for a product or service that you don’t use. Also, it’s important to review recurring charges regularly as some may renew automatically.

As you adjust your spending habits, know that by contributing to the PSPP you are saving money for your future retirement.

If you need advice on making informed decisions around your pension, contact our Client Care Centre or book a one-on-one meeting with a Client Service Advisor by logging into e-services(opens in a new tab).

OPB’s e-services portal is an easy and secure way to connect with us. If you haven’t yet registered for your e-services account, we recommend that you do so. The benefits include:

• Improved accessibility features
• Easy updating of personal information
• Access to OPB’s Secure Document Upload tool
• Choosing to receive your Annual Pension Statement or your Retired Member Statement exclusively online
• Book a 1-on-1 meeting with an Advisor
• Sign up for optional e-alerts to receive more frequent updates

Register for e-services(opens in a new tab) today. Have your OPB client number handy. If you’re having difficulty activating your account or using any of the tools in e-services, our knowledgeable staff can assist you.

A new two-year buyback window was established in August 2021 to give members the option of purchasing full-time credit for periods of eligible temporary part-time work arrangements (TPTWAs) ending before that date, with employer-matched contributions. This window will close on July 31, 2023. Members working under an eligible TPTWA that ended on or after August 1, 2021 will have two years following the end of that TPTWA to buy back full-time credit with employer-matched contributions. Buybacks by active members outside either of these two-year windows will be at actuarial cost.

TPTWAs are periods of PSPP membership when you temporarily reduced your working hours (e.g., from full-time to part-time) under an arrangement agreed in advance with your employer. For more information on temporary part-time work arrangement buybacks, please visit OPB.ca.