Estimates and Service Buyback

The following information is intended to provide you, the Employer, with information concerning Service Buyback activities.

Reference to Compensation advisor in the following text is the equivalent of an Employer representative.

You may want to know…

Introduction

A service buyback is a legally binding agreement signed by an active plan member to purchase a period of prior service in order to increase his pensionable service under the public service pension plan. It may include prior service with the federal public service, an outside employer, the Canadian Forces (CF) and the Royal Canadian Mounted Police (RCMP).

Since February 16, 2009, the Government of Canada Pension Centre (Pension Centre) is responsible for the complete service buyback process, which includes the provision of information to plan members for all departments, Crown corporations and agencies.

New members of the public service pension plan receive an Orientation Information Kit from the Pension Centre informing them that they could be eligible to buy back prior service.

The provision of information to plan members covers all aspects of the service buyback process, including the types of service available, the estimate of cost, the impact of additional service on future pension benefits, the acceptance of payments, the calculation of balances owing and of service paid to date and general information on income tax implications.

Request for Service Buyback Information

When asked about service buyback information, Compensation Advisors refer plan members to the "Your Public Service Pension and Benefits" Web site or to the Pension Centre contact information. Please provide a copy of the "Contact Us - Your Public Service Pension and Benefits" information for employees without access to the Web.

A Service Buyback Package is available on the Web portal. This package provides plan members with information on making the decision to purchase prior service, explains the administrative process and all the necessary forms.

Service Buyback Forms

  • PWGSC-TPSGC 3006-E (Service Buyback Form) (accessible only on the Government of Canada network)
  • PWGSC-TPSGC 2092 (Surrender of Benefits) (accessible only on the Government of Canada network)
  • PWGSC-TPSGC 2005 (Service Buyback Form for Transfer Value Service) (accessible only on the Government of Canada network)

Compensation Advisors must no longer accept nor forward the Service Buyback form PWGSC-TPSGC 3006-E (accessible only on the Government of Canada network) on behalf of plan members. They should advise the plan member that it must be mailed directly to the address indicated on the form. Employers who accept or forward forms could become liable for any additional costs resulting from delays incurred to plan members.

A copy of these forms will not be sent to the Compensation Advisors.

Estimate of Cost

Since February 2009, all service buyback activities have been centralized at the Pension Centre. The Pension Centre is now responsible for providing service buyback estimates and related forms to plan members based on information readily available. As part of the service, the pension expert explains the impact of purchasing potential service on future pension benefits.

When asked about service buyback information, Compensation Advisors refer plan members and prospective plan members to the Service Buyback Package and/or provide them with the Pension Centre contact information found on the "Your Public Service Pension and Benefits" Web portal. Please provide a copy of the "Contact Us - Your Public Service Pension and Benefits" information for employees without access to the Web.

Plan members can also calculate and review estimates of cost using the secure or non-secure service buyback estimator available on the Web portal.

When a plan member calls the Pension Centre, the Pension Expert will provide an estimate of cost over the phone. Only when requested will the Pension Expert provide a Service Buyback Package along with an Estimate of Cost for Pensionable Service, a letter explaining the cost, medical requirements, payment options, tax implications, Past Service Pension Adjustment (PSPA) details and all the required forms to initiate the service buyback.

Service Buyback Payments

The cost of a service buyback may be paid by one of the following methods:

  1. by monthly installments (salary deductions);
  2. by lump sum payment;
  3. by a combination of (a) and (b).

Monthly Installments

When a plan member chooses to pay by monthly installments (salary deductions), the first payment is due and payable at the end of the month in which the Service Buyback form is received by the Pension Centre.

It is the Compensation Advisors' responsibility to commence deductions for all service buybacks. Since the Compensation Advisors no longer receive the Service Buyback form, they will be advised by the Pension Centre to start deductions via the Notice to Start Deductions form PWGSC-TPSGC 2270 (accessible only on the Government of Canada network), which is sent by facsimile. Additional information for Crown corporations, agencies and territorial governments is also provided on the PWGSC-TPSGC 2270 form to assist them in calculating their "estimated" costs (employer share) associated with the employee's service buyback request.

In order to prevent defaults, it is important for Compensation Advisors to commence deductions immediately upon receipt of the PWGSC-TPSGC 2270 form. The form will indicate the deduction amount, the effective commencement date and the applicable reference number ("1" for first service buyback and "2" for the second service buyback, etc.).

When the PWGSC-TPSGC 2270 indicates an effective commencement date prior to the month that the Compensation Advisor is working on, only one month in default may be recovered.

Example

The PWGSC-TPSGC 2270 indicates a commencement effective date for the monthly deduction of January 2010, but the Compensation Advisor is working on the March 2010 pay;

The Compensation Advisor will indicate the start date of deduction as January 2010, even if he is working on the March 2010 pay;

However, since recovery of previous monthly installments is only allowed for one month, the arrears for February 2010 must be recovered, and those for January 2010 will remain in default;

Any remaining default will be added into the computation of the buyback repayment amount and period by the Pension Centre.

Non-RPS employers control their own deduction process. For this group, the Corporation or Agency will receive the PWGSC-TPSGC 2270 and commence the arrears deduction effective from the date of receipt.

Please refer to the Service Buyback Defaults section for more information on defaults occurring after the buyback process is finalized.

Leave Without Pay (LWOP)

In LWOP situations, Compensation Advisors need to advise plan members that they must send their service buyback payments directly to the Pension Centre using the Service Buyback Payment Transmittal for Plan Member on LWOP form PWGSC-TPSGC 570 (accessible only on the Government of Canada network).

Compensation Advisors are no longer responsible for forwarding service buyback payments. They must advise plan members that payments must be sent directly to the Pension Centre.

If a plan member returns to work earlier than anticipated from a period of leave without pay and post-dated cheques were forwarded to the Pension Centre, the Compensation Advisor must notify the Pension Centre as soon as possible of the actual date of return from leave without pay and provide instructions for the remaining post-dated cheques.

Lump Sum Payment

When a plan member chooses to pay by way of a lump sum, the payment must be made to the Pension Centre within 30 days of the service buyback date. If the payment is not received within 30 days of the service buyback date, then the buyback is deemed to have been made in favor of monthly installments. The Pension Centre will request that Compensation Advisors commence the monthly deductions.

The lump sum payment used to pay for the cost of a past service buyback could be from a retiring allowance, such as severance pay, or a transfer of funds from an Registered Retirement Savings Plan (RRSP) and/or an Registered Pension Plan (RPP) or it could be a cash payment.

Employer Contributions (Non-RPS)

When an active employee makes a lump sum payment towards a service buyback or to pay for leave without pay deficiencies, the Non-RPS employer is responsible for paying the matching employer share. The matching employer share of the lump sum payment will be calculated and included on the notification (invoice) that will be issued to the Non-RPS Employer by the Pension Centre on a monthly basis.

Certification of Salary

Regional accounts:

If there is a discrepancy with the salary, the Pension Centre may request a salary certification on the Request to Certify a Salary Rate form PWGSC-TPSGC 2201 from the employer. The form should be completed and sent to the Pension Centre within 60 calendar days of receipt. The Compensation Advisor is also responsible for certifying the salary when required for dates when the plan member was employed with other regional departments. Where the employee was also employed with a Non-RPS employer, salary certification must be requested by the Pension Centre from that employer.

Non-regional accounts:

The Pension Centre will request the Salary Certification on the PWGSC-TPSGC 2201 for all service buybacks requiring salary certification prior to Release 2 of the Pension Modernization project. The Pension Centre may request salary certification if there is a discrepancy with the salary after the implementation of Release 2.0 of the Modernization Project. The Compensation Advisor is responsible for certifying the salary for their organization only and for sending the completed form to the Pension Centre within 60 calendar days of receipt. If necessary, a request for salary certification for periods of employment with another Crown or Regional department will be initiated by the Pension Centre.

Certification of Service and Leave without Pay (LWOP)

The Pension Centre will request the necessary documents to certify service and LWOP. When requested, Compensation Advisors will have to complete the Elective Non-Contributory Pensionable Service Record form PWGSC-TPSGC 2001 (accessible only on the Government of Canada network) and the Certification of Leave without Pay form PWGSC-TPSGC 2123 (accessible only on the Government of Canada network) and send them to the Pension Centre within 60 calendar days of receipt.

Note

For operational service, the Pension Centre will request the necessary documents to certify service, LWOP, absences and prior service buybacks.

The Compensation Advisors are responsible to complete the following forms:

Regional Accounts

Compensation Advisors are responsible for providing the applicable service and LWOP records for all current and past service with other regional departments. Service records for non-regional accounts will be requested from the appropriate Crown by the Pension Centre. If unable to locate service and LWOP records (employee file) either at a former department, pay office or in archives within the prescribed time (60 calendar days), Compensation Advisors will advise the Pension Centre via facsimile of the unavailability of documents to certify service.

Non-Regional Accounts

Compensation Advisors are responsible for providing the service and LWOP records for their organization only. Service records for any other non-regional or regional accounts will be requested from the appropriate employer by the Pension Centre.

Service Buyback Notice

Once the service buyback has been finalized by the Pension Centre, Compensation Advisors will receive a copy of the Service Buyback Notice and will perform any action related to the amendment or the cessation of the ongoing past service arrears deduction.

Service Buyback Defaults

Default payments can be caused either through negligence of the plan member or through an administrative error. For example, a default payment could occur when:

  1. through administrative delay, the Notice to Start Deductions form PWGSC-TPSGC 2270 (accessible only on the Government of Canada network) is not received or actioned in time to commence deductions at the end of that month, and the employing department or agency fails to take a double deduction in the subsequent month; or
  2. the plan member does not send in payments for periods while on leave without pay, seasonal lay-off, or after ceasing employment, and has chosen a deferred annuity or a benefit other than a return of contributions.

    Since December 15, 2008, Pay Offices can recover defaults of $150 or less without the Pension Centre's approval for all regional pay accounts. The Pension Centre sends a letter to the Pay Office informing them that they have the authority to calculate the default.

Regional pay offices, using the Default Notice form PWGSC-TPSGC 1871 (accessible only on the Government of Canada network), identify and report defaults for Fund 1 service buyback payments up to September 30, 2003 only. There is no longer a requirement to report Fund 1 and/or Fund 2 defaults for payments after September 30, 2003.

Non-regional pay offices continue to report defaults that occurred prior to Release 2 of the Pension Modernization project using the PWGSC-TPSGC 1871.

Service Buyback Refunds

Service buyback refunds are issued either on regular pay or supplementary pay cheques depending on the situation. Compensation Advisors are responsible for the release of these cheques. However, the Pension Centre is responsible to refund any amounts received directly from the plan member.

In the majority of cases, the Pension Centre is responsible to issue refunds on behalf of the Crown corporations.

How to Complete the Required Forms

The following forms are used by the Pension Centre to process a plan member's service buyback. Once completed, please forward the form by mail to the following address:

Public Works and Government Services Canada
Government of Canada Pension Centre – Mail Facility
PO Box 8000
Matane QC G4W 4T6

PWGSC-TPSGC 1871 (accessible only on the Government of Canada network) - Default Notice

This form is used by regional and non-regional pay offices to identify and report defaults to the Pension Centre.

Note
  • Regional pay offices must report defaults for Fund 1 and/or Fund 2 up to September 30, 2003.
  • Non-regional pay offices must report all defaults up to Release 2 of the Pension Modernization project.

Description on how to fill out form PWGSC-TPSGC 1871: Default Notice.

FIELD DESCRIPTION
Plan Member's Personal Information
 Enter the member's personal information.
To
 The Pension Centre's mailing address is already entered. Enter the department/Crown, the paylist and employee number.
Sections 1 & 2
In reference to service buyback arrears for
  • Enter the date of the service buyback as indicated on the Service Buyback Notice.
  • Enter the monthly deduction as indicated on the Service Buyback Notice.
Section 3
Period of Default
 Enter the "FROM" and "TO" dates of the default payments in MONTH and YEAR and the reason.
Section 4
Monthly Deductions Taken
  • Enter all actual payments taken, both regular and partial monthly payments.
  • Start with the month and year that the first payment was made.
  • Enter the last month and year where the payments remained the same as when they started OR the month and year in which you are working.
  • Every time the payment rate changes, a separate line must be completed.
  • The monthly amount must be divided appropriately (i.e. while a plan member, while not a plan member, post 1989 and Retirement Compensation Arrangement (RCA)).
Section 5
Lump Sum Payments (LSP) Received
  • Enter all cash or RRSP lump sum payments (LSP) received.
  • Use a separate line for each LSP.
  • The LSP amount must be divided appropriately (i.e. while a plan member, while not a plan member, post 1989 and RCA).
Section 6
Certification
  • Indicate your name, location and telephone number and then sign and date the form certifying that the information is correct.

PWGSC-TPSGC 2001 (accessible only on the Government of Canada network) – Elective Non-Contributory Pensionable Service Record

PWGSC-TPSGC 2001-1 (accessible only on the Government of Canada network) – Elective Pensionable Service Record for Operational Service

The Pension Centre will request this form for buybacks of non-contributory service that is not recorded on the automatic pay system, or for which it doesn't already have the form on file.

Description on how to fill out forms PWGSC-TPSGC 2001: Elective Non-Contributory Pensionable Service Record and PWGSC-TPSGC 2001-1: Elective Pensionable Service Record for Operational Service.

FIELD DESCRIPTION
Plan Member's Personal Information
 Enter the member's personal information.
Department Information
 Enter the department or Crown Corporation information.
Section 1
Employment
  • This section confirms the dates for periods of employment, length of period, SWW, AWW, classification, and, if applicable, periods of LWOP.
    (Refer to page 3 of the form for instructions on how to complete this section.)
  • For part-time service, the LWOP must be reported in hours and not days.
Section 2
Pensionable Earnings for Post 1989 Service
  • This section must only be completed if the plan member wishes to buy back post 1989 non-contributory service.
    (Refer to page 3 of the form for instructions on how to complete this section.)
  • Pensionable earnings must be broken down separately by each calendar and/or payroll calendar year beginning January 1, 1990.
  • Retroactive adjustments should be added to the pensionable earnings and reported during the year it was paid and not during the period of service or year to which it pertains.
Certification
 Indicate your telephone and fax numbers and then sign and date the form certifying that the information is correct.

PWGSC-TPSGC 2123 (accessible only on the Government of Canada network) – Certification of Leave without Pay (LWOP)

This form is to be completed to report periods of leave without pay, strike and suspension which occurred during contributory service for which the plan member has chosen to buy back. It is also required for all buybacks for prior contributory service that occurred on and after January 1, 1990 for which a lump sum benefit (i.e. Return of Contributions (ROC)) was paid upon termination of employment, regardless of whether the plan member was on LWOP, strike and suspension during that time.

It is acceptable to have multiple periods of contributory service on the same PWGSC-TPSGC 2123, as long as the ROC information for each period is clearly divided in Section F of the form.

For detailed information on the completion of the PWGSC-TPSGC 2123, please visit the ARCHIVED - Superannuation Administration Manual (SAM) Special Bulletin 2005-001.

Description on how to fill out form PWGSC-TPSGC 2123: Certification of Leave without Pay.

FIELD DESCRIPTION
Plan Member's Personal Information
 The member's personal information is entered by the Pension Centre.
Section A
 The Pension Centre will complete the name of the department or Crown Corporation and "FROM" and "TO" dates for all prior contributory service that occurred on or after January 1, 1990 for which a lump sum benefit, such as a return of contributions (ROC), was paid upon termination of employment.

For each period of service indicated, the Compensation Advisor will indicate the AWW and SWW.
Section B
 If applicable, report periods of leave without pay for which contributions were required and indicate the reason code. If the reason code is not included in the list in section C, enter "Other" and specify in Section G.
  • Refer to section 3.3 of Special Bulletin 2005-001 for examples.
Section C
 If applicable, report periods of LWOP for which the employee made an option not to count the period in excess of the first three months as pensionable service.
  • Indicate if a Pension Adjustment (PA) was reported for the indicated LWOP periods.
  • If reason code is not indicated in the list, enter "Other" and specify in section G.
Section D
 Report any periods of non-pensionable service such as periods of strike and suspension and indicate the reason code. If the reason code is not included in the list, enter "Other" and specify in Section G.
Section E
 Complete this section only if ROC was paid on or after January 1, 1997.
  • Report the pensionable earnings for periods of contributory service that occurred on and after January 1, 1990. These must be broken down separately by each calendar year and/or payroll calendar year beginning January 1, 1990.
  • Refer to section 3.7 of Special Bulletin 2005-001 for detailed instructions on reporting pensionable earnings.
  • For additional information, refer to ARCHIVED - Compensation Directive 1994-012 and the SAM Special Bulletin "Canada Pension Plan/Quebec Pension Plan (CPP/QPP) Contribution Rate, Public Service Superannuation Act (PSSA)/RCA Employee and Employer Contribution Rates, Salary Thresholds, Indexation, PA Calculations" which is issued each year, at the end of the year.
Section F
 Complete this section only if ROC was paid on or after January 1, 1997.
  • If ROC was transferred to an RPP, indicate in section G whether the RPP was a defined benefit or defined contribution type plan.
Section G
 Use this section to provide any additional information or clarifications.
Section H
Certification
 Indicate your name, e-mail address, telephone and fax numbers and then sign and date the form certifying that the information is correct.

PWGSC-TPSGC 2201 – Request to Certify a Salary Rate

The Pension Centre will request this form when there is a discrepancy with a previously certified salary or salary information contained in the pension system.

Note

Promotions and salary revisions authorized retroactively after the date specified by the Pension Centre do not apply for the purpose of calculating the cost of a service buyback. Salary amendments paid after the date specified but authorized prior to that date must be used.

Description on how to fill out form PWGSC-TPSGC 2201: Request to Certify a Salary Rate.

FIELD DESCRIPTION
Plan Member's Personal Information
 The relevant data is entered by the Pension Centre.
To
 The Pension Centre enters the Human Resources (HR) information.
From
 The Pension Centre completes their contact information (name, telephone and fax numbers).
Department, Pay Office, Paylist and Date
 The appropriate data is entered by the Pension Centre.
Please state the full-time equivalent salary and allowance rate, Standard Work Week, Assigned Work Week (if applicable) for date(s) indicated below
 The Pension Centre indicates the date(s) for which they need the salary certification.

The Compensation Advisors will complete the missing information [i.e. Full-Time Equivalent (FTE) Salary, Allowance, Standard Work Week (SWW), Assigned Work Week (AWW) and the date of the collective agreement or equivalent].

  • Salary and allowance rates must conform to one of the five pay methods.
  • SWW: Indicate the number of hours in a week that the employee was required to work.
  • AWW: Indicate the number of hours the employee was hired to work per week.
  • The date of the collective agreement must be the date of the agreement signed immediately prior to the date of the salary that is being certified.
Certification
 Indicate your name, location and telephone number and then sign and date the form certifying that the information is correct.

PWGSC-TPSGC 2469 (accessible only on the Government of Canada network) – Election to Continue to Pay Extra Contributions for all Additional Years of Non-Operational Service – IF APPLICABLE

This form is only to be completed if the member is electing to count their additional non-operational service, as operational service. This means that the member worked for at least ten years in actual operational service, but is now working in a non-operational setting with CSC (Correctional Service of Canada).

Description on how to fill out form PWGSC-TPSGC 2469: Election to continue to Pay Extra Contributions for all Additional Years of Non-Operational Service – IF APPLICABLE.

FIELD DESCRIPTION
Part A
  • Enter all department information.
  • Date of Commencement of Operational Service – The start date of the first period of service in which the member was employed in actual operational service in their career.
  • Date of Termination of Operational Service – The date of termination from actual operational service.
  • Date Appointment Document Issued – The date of the letter of offer to the non-operational appointment.
  • Enter the Personal Record Identifier (PRI) and Pension number.
Part B
  • To be completed by Plan Member (surname, given name and complete home address)
  • Signature of plan member with date. Witness may be the Compensation Advisor.

Absences from Operational Service – Correctional Service of Canada

This form is used to certify absences from operational service. The Compensation Advisor must report any absences from operational service, including LWOP, secondment, training, etc.

Description on how to fill out the form Absences from Operational Service.

FIELD DESCRIPTION
Covering Letter
 The Pension Centre completes the covering letter as a request for information.
Form Attached to the Covering Letter
 Record all absences from actual or deemed operational service.
  • Examples of absences from operational service are terms at the regional headquarters and terms to other departments (other than Correctional Service of Canada).

If there is no applicable information, please indicate "no absences from operational service" and send the form back to the Pension Centre.

Certification of Operational Service – Correctional Service of Canada

This form is used to certify the periods of actual operational service.

Description on how to fill out the form Certification of Operational Service.

FIELD DESCRIPTION
"FROM" Information
 Enter the department or Crown Corporation's information.
Member Information
 The Pension Centre enters the member's Pension Number, PRI, Surname and Initials. Enter Date of Birth.
Start date of operational service
 The start date of the first period of service in which the member was employed in actual operational service in their career.
Last termination date of operational service (if applicable)
 If applicable, the date of termination from the last period of service in actual operational service.
Last termination date of employment (if applicable)
 If applicable, the date of the last Struck-Off Strength (SOS).
Current Service
 List all periods of pensionable service while in actual or deemed operational service (whether as a contributor or a non-contributor).
Non-Countable Service and/or Non-Pensionable LWOP
 List all periods of non-countable service and/or non-pensionable LWOP which occurred in actual or deemed operational service (whether as a contributor or a non-contributor).
Elective Service
 Any periods of operational service previously bought back as per the PWGSC-TPSGC 2097.
Certification
 Indicate your name, title, telephone number and then sign and date the form certifying that the information is correct.

Highlights

Related Links

Your Public Service Pension and Benefits

pensionandbenefits.gc.ca

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