Service Buyback Package

This package provides you with information about elections to purchase prior pensionable service also known as buying back service.

Explore these sections to learn more about buying back service:

Service Buyback

A Service Buyback is a legally binding agreement to purchase a period of prior service to increase your pensionable service and potentially your service in the Force under the Royal Canadian Mounted Police (RCMP) Pension Plan. It may include a period of prior RCMP Service, Federal Public Service or pensionable employment, with another employer. Refer to Prior Service for further details.

Normally, you may buy back service at any time while you are employed at the RCMP and contributing under the RCMP Pension Plan. Cost and other requirements may vary, depending on the type of service and when you make the buyback. The type and period of service has to be verified before the Service Buyback is approved.

You may only accumulate up to a maximum of 35 years of pensionable service. This 35 year maximum includes the following types of service:

  • Service for which you contributed to the RCMP Pension Plan. This includes both current contributory service and service which you have purchased (Service Buyback) or transferred from another pension plan;
  • Service under the Canadian Forces pension plan;
  • Service under the Public Service Pension Plan, Diplomatic Service Pension Plan, the Judges Pension Plan and the Members of Parliament Pension Plan.

When any of the elective service you are buying back occurred on or after January 1, 1990, a Past Service Pension Adjustment (PSPA) calculation must be performed. A PSPA greater than $50.00 must be certified by the Canada Revenue Agency (CRA) before that service can be counted as pensionable under the RCMP Pension Plan. Refer to Tax Implications for further details.

Advantages

Advantages of buying back prior service include:

  • Increased pensionable service, which increases your pension;
  • Increased termination and retirement benefits with the RCMP;
  • Increased survivor benefits with the RCMP;
  • The possibility of retiring earlier;
  • Portions of your payments are income tax deductible.

All pension benefits payable under the plan relate directly to service and salaries. As the number of years of pensionable service to your credit increases and you reach higher levels of salary, the pension benefits that you and your eligible survivors can expect to receive increases accordingly.

Prior Service

If all eligibility criteria are met, you may buy back the following types of prior service:

Here are some elements to consider when buying back prior pensionable service:

In certain situations a medical examination may be required to validate the buyback.  As well, there are a number of tax rules that apply.  For example:

  • If you buy back pensionable employment outside of the Federal Government, any pre-1992 service must be purchased by means of a direct transfer from your previous pension plan.  If your funds have already been moved out of the plan, then the pre-1992 service cannot be purchased;
  • If you buy back previous RCMP, Public Service or Canadian Forces service in respect of which you received a Transfer Value or Commuted Value, the pre-1992 service must be purchased by a transfer from registered funds;
  • If you purchase prior service which occurred on or after January 1, 1990, the Canada Revenue Agency must certify that you have enough available Registered Retirement Savings Plan (RRSP) room to account for the increased value of your pension benefit with the RCMP Pension Plan.  If you do not have the contribution room available, you will have the option of either de-registering a portion of your RRSP, transferring the amount to pay for the Service Buyback directly from your RRSP, or canceling the buyback;
  • Rules related to the tax deductibility for instalment payments differ when purchasing post-1989 service and pre-1990 service.

The eligible service must be paid service of 90 consecutive days or more, except for:

  • Previous periods of service with the RCMP;
  • Previous periods of service with the Public Service or the Canadian Forces, where there is no break in service between the prior service period and your engagement date with the RCMP;
  • Periods of service with another police force that has been absorbed into the RCMP;
  • Part-time Public Service;
  • Pensionable Employment (PE) with an outside employer where you contributed to that employer's pension plan. The pension plan must be registered under the Income Tax Act;
  • Prior service with the RCMP, the Canadian Forces (CF) or the Public Service (PS) in respect of which you received a transfer value (TV) (formerly referred to as a commuted value under the RCMP Pension Plan);
  • RCMP service that you previously transferred out under a Pension Transfer Agreement (PTA) that is no longer to your credit under the plan to which it was transferred.

You cannot buy back the following service:

  • Service as an RCMP Cadet which occurred on or after April 1, 1994;
  • Service while on an unauthorized Leave Without Pay (LWOP), or an LWOP as the result of a strike;
  • Service while suspended without pay;
  • Service while suspended for loss of basic requirements;
  • Service for which you were a contract employee;
  • LWOP exceeding the acceptable limits defined under the Income Tax Act;
  • Temporary Civilian Employees hired on an as and when required basis;
  • Service with the Canadian Forces Reserve Force Pension Plan;
  • Service with the Federal Government or outside employer that does not meet the requirements of the RCMP.

Surrendering Previous Pension Entitlements

Please keep in mind that you must surrender any pension entitlement you may have with another employer before you can count that service as pensionable under the RCMP Pension Plan. Once you complete a Service Buyback Form, the Government of Canada Pension Centre (Pension Centre) will contact you with details concerning the surrender of your previous entitlement. Refer to the Tax Implications for additional information.

Consequently, if you intend to leave within that period, you should consider whether it is in your interest to surrender the entitlement under the outside plan.

Buying Back Partial Periods of Prior Service

You may buy back all or part of a period of prior service. If you are buying a part of a period, in most cases, it must be for the part that occurred most recently.  This requirement does not apply if you have periods of part-time Public Service.  The Government of Canada Pension Centre can provide you with information about exceptions to this requirement.

Description of the Different Types of Prior Service

Prior RCMP Service

If all eligibility criteria are met, you may buy back the following types of prior service:

  • Previous periods of service with the RCMP including service with Canadian Security Intelligence Service (CSIS) for those members who transferred to CSIS from the RCMP on July 15, 1984;
  • Any periods of leave without pay (LWOP) from the RCMP that you had previously opted not to count as pensionable service;
  • Service as a Supernumerary Special Constable with the RCMP (summer student constable);
  • Service as a Temporary Civilian Employee (TCE) with the RCMP (except when hired on an as & when required basis);
  • Prior service with the RCMP in respect of which you received a transfer value (TV) (formerly referred to as a commuted value) under the RCMP Pension Plan;
  • RCMP service that you previously transferred out under a PTA that is no longer to your credit under the plan to which it was transferred.

Service with the Canadian Forces or the Federal Public Service

You may buy back different types of service depending on your pension benefit entitlement status under Canadian Forces Pension Plan or the Public Service Pension Plan.

The cost to count the service depends on when you are making your buyback and the category that describes your service:

  • Prior non-contributory service
  • Contributory service for which you received or are entitled to receive a return of contributions
  • Contributory service for which you are in receipt of or are entitled to a pension benefit.
  • Previous service with the Canadian Forces where you have received a transfer value;
  • Periods of Reserve service in the Canadian Forces that must be continuous full-time paid service of at least 6 months.
  • Previous service with the Public Service where you have received a transfer value.  You must not have had a previous opportunity to purchase this service under the Public Service Pension Plan for it to be eligible.

If you are in receipt of a pension under one of these plans, you may surrender your pension entitlement in order to combine all your pensionable service under the RCMP Pension Plan. In that case, all pension benefits received from your former plan, after your first year as a plan member under the RCMP Pension Plan, must be repaid to them. You must also continue to pay any amount you still owe under the former plan.

Once a plan member chooses to buy back service under this section, he surrenders his right to any pension benefit entitlement under the Canadian Forces or the Public Service Pension Plan in respect of that service. Prior to signing the Election for Prior Service and/or Surrender of Benefits under the Canadian Forces Superannuation Act or the Public Service Superannuation Act (RCMP-GRC A-2-2E) form, you may wish to obtain an estimate of the increase to your pension as a result of counting the service under the RCMP Pension Plan. Only the Specialized Services Division of either the Canadian Forces or Public Service can advise you of the monthly cost to repay your pension and any other amount you owe to those plan administrations.

Service as a Member of Parliament

You may buy back your prior service by surrendering your pension entitlement under the Members of Parliament Pension Plan. The cost of counting this prior service depends on whether you became entitled to a pension or a withdrawal allowance (lump-sum payment) on ceasing to be a member under that plan.

If you are entitled to a pension, you must surrender it and repay, with interest at four per cent per annum, any pension you received after your first year as an RCMP plan member. You must also pay any contributions still owing under the Members of Parliament Pension Plan and pass a Medical Examination.

If you received a lump-sum payment under the Members of Parliament Pension Plan, you will contribute based on your salary when you most recently became an RCMP Pension Plan member if you buy back your service within one year of becoming an RCMP Pension Plan member.  If you buy back the service later than one year after becoming a contributor to the RCMP Pension Plan, you will contribute based on your salary at date of election and you must pass a Medical Examination.  In both cases, Interest is added from the time the service occurred until the date you make your election to count the service under the RCMP Pension Plan.

As the benefit formula under the Members of Parliament Pension Plan is significantly different from that of the public service pension plan, you should obtain an estimate of your pension benefits payable as well as the cost to count this service under the RCMP Pension Plan before surrendering your benefit entitlement. For an estimate, please contact the Pension and Benefits Sector of the Treasury Board Secretariat.

Pensionable Employment Outside of the Federal Government

Pensionable Employment (PE) is any employment with an outside employer where you were subject to that employer's pension plan.  The pension plan must be registered under the Income Tax Act.  This type of service can be purchased by means of a PE Service Buyback or through a Pension Transfer Agreement (PTA).

Please note that service accrued under a Deferred Profit Sharing Plan, a Group Registered Retirement Savings Plan or a Pooled Registered Pension Plan cannot be bought back as pensionable employment under the RCMP Pension Plan.

If the service occurred before 1992, it must be purchased by means of a direct transfer from the previous pension plan.  If the funds have already been moved out of the plan, then this period of service cannot be purchased.

If the service occurred on or after January 1, 1992, you may be eligible to buy it back even if the funds have already been moved out of the previous pension plan.  If you are still entitled to a pension benefit with that plan, you must be able to surrender it in order to count the service under the RCMP Pension Plan.   

You should also remember that if you leave the RCMP with less than two years of service in the Force you are only entitled to a return of your contributions paid into the RCMP Pension Plan, including any funds transferred directly from a previous pension plan.  If those funds were locked-in at the time of the transfer, they will be paid out to another locked-in retirement savings vehicle.

Consequently, if you intend to leave within that period, you should consider whether it is in your best interest to surrender your pension entitlement under the outside plan. 

Before making a decision concerning the value of surrendering a pension entitlement with your former employer, please carefully evaluate the potential benefits payable under your former plan against the additional benefit payable under the RCMP Pension Plan. To obtain benefit estimates under the RCMP Pension Plan, you can access the Secure Pension Web Applications - Service Buyback Estimator or request an estimate from the Government of Canada Pension Centre.  In addition, we strongly recommend that you consult with a financial advisor at your own expense, to assist you in evaluating your options under both plans.

If you decide to surrender and buy back your outside employment, you must complete and forward the following form to your former employer.

Pensionable Employment Questionnaire RCMP-GRC 2069E

When the Pension Centre receives your completed Service Buyback Form RCMP-GRC 3006-1E, they will contact you with details concerning the surrender.

For information on the cost of prior service, please refer to Costing.

Pension Transfer Agreements

Pension Transfer Agreements (PTA) provide another way of counting your prior pensionable service with an outside employer under the RCMP Pension Plan.  It also provides another way for you to transfer your RCMP Pension Plan credits to an outside employer.

If you leave outside employment to become employed as a member of the RCMP and a PTA has been negotiated between the two employers, you may be eligible to transfer your accrued pension credits to the RCMP Pension Plan. Please note that the acquired pension credits under the RCMP Pension Plan as a result of the transfer may not be equivalent to the exporting employer's pension credits. For example, this may occur when the benefit formula under your previous employer's pension plan was lower than the one under the RCMP Pension Plan.

For more information about a PTA, please contact the Government of Canada Pension Centre. You may also refer to the Pension Transfer Agreements Package.

Costing

You may normally buy back a period of prior service at any time while you are a member of the Force.

Your salary and, in some cases, your age affect the cost of buying back service. Depending on whether you have a “normal” or “late” buyback, different salary rates are used in the calculation of the cost. A higher salary results in a higher cost.

Other factors that affect the cost of a Service Buyback include:

  • The day you sign your service buyback form;
  • The type of Service Buyback;
  • Whether or not you were a contributor to your previous employer's pension plan during the period of prior service;
  • The type of benefit received from your former employer;
  • The dates the service occurred;
  • The salary used to calculate the cost of the buyback;
  • Whether you choose to pay for the buyback in a lump sum or by instalments.

A “normal” Service Buyback is one that is made within one year of becoming a contributor to the RCMP Pension Plan.   In this situation, the salary used to calculate the cost of buying back service is your salary on the date you became a plan member.

A “late” buyback is one that is made more than one year after you became a contributor to the RCMP Pension Plan, or any buyback for a period of service that you previously had an opportunity to purchase but did not. For example:

  • RCMP LWOP periods that you originally chose not to buy back (within 3 months of your return to duty);
  • Where you were previously a contributor under the Public Service or Canadian Forces Pension Plan and did not purchase a prior period while subject to that previously plan and you subsequently choose to buy it back under the RCMP Pension Plan.

The salary rate used for a “late” Service Buyback is the salary authorized to be paid on the date you signed the Service Buyback form or the Election for Prior Service and/or Surrender of Benefits under CFSA or RCMPSA form. In many cases, this could cost you substantially more.

Before buying back service you should obtain an Estimate of what your prior service will cost. You can use the Secure Pension Web Applications - Service Buyback Estimator or request an estimate from the Government of Canada Pension Centre.

The formula used to determine the cost of a buyback for prior service with the RCMP, Public Service, Canadian Forces, or as a Member of Parliament is usually a contribution based calculation.  Contributions plus interest are calculated for the period of service based on the applicable salary rate.

An actuarial going-concern method is used to calculate the cost of a buyback for: 

  • prior pensionable employment with an employer outside of the Federal Government;
  • prior service in respect of which a Commuted Value or a Transfer Value was received under the RCMP, Public Service, or Canadian Forces Pension Plan; and.
  • prior RCMP service that was transferred out to an eligible employer under a Pension Transfer Agreement and that is no longer to your credit under the plan to which it was transferred. 

Tax Implications

Past Service Pension Adjustment (PSPA) Certification

Under the Income Tax Act rules for Registered Pension Plans (RPP), a plan may not recognize periods of past service that occurred after December 31, 1989 for pension purposes unless officials of the Canada Revenue Agency (CRA) certify the PSPA calculated and reported in respect of that service. If your RRSP deduction limit (RRSP room) does not permit the certification of the PSPA, your prior service cannot be counted and any payments you may have made will be refunded to you.

Generally, this certification depends on whether the PSPA exceeds your unused RRSP room at the end of the previous year by more than $8,000. Your unused RRSP deduction limit for the previous year is indicated on your most recent "Notice of Assessment" issued by CRA.

If you have made maximum RRSP contributions over the years, your RRSP deduction limit may be insufficient to allow certification of the PSPA associated with your past service. In this situation, CRA will contact you and may allow up to a negative $8,000 RRSP deduction limit to certify a PSPA. In this case, you would be unable to make additional RRSP contributions until your RRSP deduction limit reaches a positive value. As an alternative, you may transfer RRSP funds directly to the RCMP Pension Plan. Another option is that CRA may allow you to designate a qualifying RRSP withdrawal to allow the PSPA to be certified.

Normally, a direct transfer of funds from your RRSP received prior to the PSPA calculation reduces the amount of the PSPA reported to CRA. If you feel you may not have sufficient RRSP room to allow certification of the PSPA, you may wish to consider paying part of your past service by completing a Direct Transfer under subsection 146.3(14.1) or paragraph 146(16)(a) or 146.3(2)(e) form for RRSP transfers.

Deductibility of Registered Pension Plan Contributions

Payments made through a direct transfer from registered vehicles, i.e. regular RRSP, locked-in RRSP, registered pension plans, deferred profit sharing plans (DPSP) and Locked-in Retirement Account (LIRA) are transferred on a tax sheltered basis. The Income Tax Act provides that the amount of such a transfer is not included in calculating an individual's income, nor can that individual claim any deduction for the amount of the transfer.

The tax deductibility of cash contributions (semi-monthly instalments or lump sum payment by cheque) paid to buy back service is as follows:

  • For contributions for service which occurred prior to January 1, 1990, and for which you contributed to an RPP, the tax deductibility is limited to $3,500 per year minus current contributions and other past service contributions.
  • For contributions for service which occurred prior to January 1, 1990, and for which you did not contribute to an RPP, the tax deductibility is limited to $3,500 per year, in addition to contributions made for your current service and may be postponed for future use. The total overall tax limit for these contributions is determined as follows: $3,500 x the number of years or partial years of this type of service purchased.
  • Contributions for service which occurred after December 31, 1989 are fully tax deductible for the tax year in which they were paid. There is no limit to the tax deductibility of post-1989 contributions provided you have equal net taxable income for that year.

You may consult Chapter 1 of CRA's guide entitled RRSP's and Other Registered Plans for Retirement (T4040) for further information on the tax deductibility of Registered Pension Plan contributions.

Deductibility of Retirement Compensation Arrangement (RCA) Contributions

The RCMP Pension Plan must limit employee contributions, including Service Buyback instalments, in accordance with restrictions set out in the Income Tax Act.  Contributions in excess of the limits are paid into a Retirement Compensation Arrangement (RCA) Account.  This normally applies to high income earners.

If you are required to contribute to the RCA Account, payment must be made, either by instalments from pay or by cheque or money order.  You cannot pay for RCA contributions via a direct transfer of registered funds such as a regular RRSP, a locked-in RRSP, another Registered Pension Plan, a DPSP or a LIRA, for example.

Normally, RCA contributions are fully tax deductible in the year you make them.

For additional information regarding your tax situation you are welcome to contact your local CRA office.

Estimates

You may estimate the cost of buying back service by using the Service Buyback Estimator; however, there are various limitations on estimates generated by this method. If you are unable to estimate the cost of your service because of these limitations, please contact the Government of Canada Pension Centre to obtain an estimate.

Before performing an estimate or contacting the Government of Canada Pension Centre, you should have the following information on hand:

  • Date of Joining the Plan
  • Annual Salary
  • Service Type
  • Service Buyback Periods

Once you have reviewed the information on the website and decided to buy back service, you may consult the Contact Us - Government of Canada Pension Centre for any additional information.

Limitations

There are certain types of Service Buyback that cannot be estimated by the Service Buyback Estimator. For these types of service please contact the Government of Canada Pension Centre to obtain an estimate. The following are the limitations of the Service Buyback Estimator:

  • If your service includes part-time periods, the Service Buyback cost estimate will be overstated since the estimator is designed for estimating full-time service only.
  • The estimator does not calculate the cost of electing to count periods of leave without pay.
  • The estimator does not calculate the costs of transfers of service.
  • The estimator does not calculate the costs of purchasing service from an employer outside the Federal Government
  • The estimator does not calculate the costs of purchasing prior service where the member received a Commuted Value or Transfer Value.

Medical Examinations

You must undergo and pass a medical examination when you:

  • Make a “late” buyback; or,
  • Surrender a Public Service, Canadian Forces, or Members of Parliament pension entitlement to the RCMP Pension Plan.

If the medical is not passed, then the Service Buyback is void. 

The medical examination must be undergone within six months before or six months after the date the service buyback form or the Election for Prior Service and/or Surrender of Benefits under the Canadian Forces Superannuation Act or the Public Service Superannuation Act (RCMP-GRC A-2-2E) form is signed.  You should therefore contact your physician as soon as possible and advise the Government of Canada Pension Centre if you experience difficulty in obtaining an appointment within this timeframe. Upon request, this deadline may be extended by six months if through no fault of your own; you were unable to obtain a medical within the prescribed period.  The medical examination is undergone at your own expense.

You are considered to have passed the medical examination where the physician certifies, in writing on the RCMPSA Medical Examination Certificate that you have a life expectancy of at least 5 years from date of examination. 

Exception:

If your Service Buyback is for prior:

  • part-time Public Service;
  • pensionable employment with an employer outside the Federal Government;
  • service in respect of which you received a Commuted Value or a Transfer Value under the RCMP, Public Service or Canadian Forces Pension Plan; or,
  • RCMP service previously transferred out under a Pension Transfer Agreement that is no longer to your credit under the plan to which it was transferred.

The following rules apply:

  • You do not require a medical if you make a “late” buyback and you pay in a lump sum;
  • If you make a “late” buyback and you pay by semi-monthly instalments, then the medical is required;
  • If you fail to pass the medical, the Service Buyback for these types of service is not automatically void.  You may pay the amount owing, in a lump sum or partial lump sum, within 30 days of an advisory notice being sent.  If you do not remit a payment within this time, then the instalments paid to date are applied against the cost of the Service Buyback in which case the portion of service equal to the portion purchased by the instalment payments is counted as pensionable service;
  • If you pay the amount owing in full within the specified time the full period shall be counted as pensionable;
  • If you make a partial payment, the portion of service purchased will be prorated accordingly.

The following form, which your physician must fill out, sign and forward, is required for your medical examination and will be provided by the Pension Centre:

Keep a copy for your records and send the original to the Government of Canada Pension Centre.

Service Buyback Forms

All of the forms mentioned in this section are in PDF format, which means that you need the Adobe Acrobat Reader (www) to be able to view and print them. To obtain copies of these forms in a format designed to meet the needs of the visually impaired, please contact the Government of Canada Pension Centre (Pension Centre).

There are various forms required for a Service Buyback, depending on your individual situation.  In order to buy back service you must complete one or more of the following forms, keep a copy for your records and send the original by registered mail to the address indicated on the forms.  It is strongly suggested that you obtain an estimate before proceeding with any Service Buyback.

  • Form RCMP-GRC 3006-1E - Service Buyback Form

    Complete this form if you wish to buy back prior service with another Canadian pension plan registered under the Income Tax Act and/or for service for which you received a transfer value under the RCMPSA, CFSA or PSSA and/or for prior RCMP service previously transferred out under a pension transfer agreement that is no longer to your credit under the plan to which it was transferred to have this service counted as pensionable under the RCMP Pension Plan

  • Form RCMP-GRC A-2-2E - Election for Prior Service and/or Surrender of Benefits under the Canadian Forces Superannuation Act or the Public Service Superannuation Act

    Complete this form if you wish to buy back prior service from the Canadian Forces, RCMP or Public Service and have that service count counted as pensionable service under the RCMP Pension Plan. This form may also be used to surrender your benefits under the Canadian Forces or the Public Service.

  • Form RCMP-GRC 3006-2E - Balance of Pension Transfer Agreement Service Buyback Form

    Complete this form if you wish to buy back the balance of service not covered by a Pension Transfer Agreement.  You must forward the completed form within six months of notification of the cost to purchase the service not credited by the transfer. 

  • Form RCMP-GRC 1888E - Service in the Force Declaration Form (if applicable)

    Complete this form to confirm your prior service as a police officer to receive service in the Force credit.

  • Form RCMP-GRC 2082E - Medical Examination Certificate

    Complete this form if required to validate a service buy back.

  • Form RCMP-GRC 2069E - Pensionable Employment Questionnaire

    Have your former employer or pension administrator complete this form if you are buying back prior service outside the RCMP.

  • Form RCMP-GRC 570E - Payment Transmittal Form

    Complete this form to send your payments in respect of a pension contributions and/or a Service Buyback payment.

Please refer to Costing for information on how the cost of a Service Buyback is calculated.

A valid election to buy back additional pensionable service made under the terms of the RCMP Pension Plan is a legally binding agreement that can only be revoked under very exceptional circumstances. You will receive written notification in the form of a Service Buyback Notice (RCMP-GRC 2097) once your request to buy back service has been approved.

Payments

Lump Sum Payments versus Semi-Monthly Instalments

You may pay for your Service Buyback:

  • In a lump sum;
  • By semi-monthly instalments; or
  • By a combination of these two methods.

The instalment method includes interest and mortality charges. In the event of your death, the election is considered paid in full, with the exception of any payments in default (missed payments) to that point in time. As the instalment method is more costly than paying by a lump sum payment, you should compare the two costs before making a decision on how you wish to pay for the Service Buyback.

Cash Lump Sum Payments

If the total period of service you chose to buy back is post-1989 service, the entire amount of the cash payment is fully tax deductible and must be claimed in the tax year it was paid. The amount will be included on your annual tax slip for the year (T4 or T4A). However, if any or all of the lump sum cash payment is in respect of pre-1990 service, the tax deductibility is limited. Before making a large lump sum cash payment, ensure that you understand the tax deductibility limits applicable to cash payments. Refer to the Tax Implications page for further information on tax implications.

Cash (or money order) payments must be made payable to the Receiver General for Canada.  If accompanying the election form, it must be sent directly to the address indicated on that form.

Payments not accompanying the election form must be forwarded directly to the Government of Canada Pension Centre.

Direct Transfer from a Registered Retirement Savings Plan (RRSP)

You may pay for prior service by means of transferring RRSP contributions. In order to do so without having income tax deducted, you must complete a Direct Transfer under subsection 146.3(14.1) or paragraph 146(16)(a) or 146.3(2)(e) form for RRSP transfers. This form is also available from your financial institution or the Canada Revenue Agency (CRA).

If you transfer funds from an RRSP to buy back service, you must complete Area 1 of the Direct Transfer under subsection 146.3(14.1) or paragraph 146(16)(a) or 146.3(2)(e) form and forward it along with the Election Form for Elective Pensionable Service to the address indicated on that form. When completing the form, please provide your current address, the RRSP account identifier and where the form indicates "in cash" or "in kind", select "in cash".

If your cheque, money order or Direct Transfer under subsection 146.3(14.1) or paragraph 146(16)(a) or 146.3(2)(e) form is not received within 30 days from the date you sign the election form, the Pension Centre will assume you have opted to pay by semi-monthly instalments.

Direct Transfer From Your Former Pension Plan

You may also pay for prior service through a direct transfer from your former pension plan. In order to do so without having income tax deducted, you must complete a Record of Direct Transfer of a Single Amount form (T2151). This form is available from the administrator of your former pension plan or CRA.

The T2151 should be forwarded along with the Election Form for Elective Pensionable Service to the address indicated on that form. Upon receipt of your election form, the Pension Centre will contact you concerning this payment option.

Registered funds transferred into the RCMP Pension Plan cannot be certified as "locked-in" in accordance with the federal or provincial pension benefits standards legislation. Transferred funds are locked-in according to the provisions of the RCMPSA and not that of other pension benefits standards legislation. For this reason, some pension plan administrators and financial institutions may be reluctant or unwilling to transfer your funds. Contact your former employer or pension plan administrator in order to obtain more information on their transfer requirements and the amount of funds available. The Pension Centre can provide details of the RCMPSA lock-in provisions. Please note that the amount available for transfer to buy back service may not be the same as the amount available for transfer under the terms of a Pension Transfer Agreements (PTA).

Instalments

As indicated, the semi-monthly instalment method is more costly than paying by lump sum because of added interest and mortality charges.

If you pay by semi-monthly instalments, the first instalment is due the month following the date you signed the Service Buyback Form (RCMP-GRC 3006-1E) or the Election for Prior Service and/or Surrender of Benefits under the Canadian Forces Superannuation Act or the Public Service Superannuation Act Form (RCMP-GRC A-2-2E). The first deduction may be larger than the regular semi-monthly amount if deductions are not started on time. Also, proof of age is required when semi-monthly instalments have been chosen as the payment method. If satisfactory proof of age is not on file when you sign your election form, the Pension Centre will request that you submit one. A letter will be sent to you outlining the requirements, the time limit for submitting the proof of age documents and the consequences of not supplying the required documents within the prescribed time.

The instalment options are as follows:

  • The maximum repayment period is 20 years, or over a term that ends by age 65, whichever provides the longer period.  For example, a member who purchases prior service at age 50 will have a maximum of 20 years to complete his/her instalments, while a member who purchases prior service at age 30 will have a maximum of 35 years (up to age 65) to pay his/her instalments;
  • The monthly instalment amount may be no less than $5.00;
  • The mortality and interest rates used to determine the instalments are those used in the most recent actuarial valuation report on the RCMP Pension Plan.

Note that if you already have a Service Buyback that you made prior to September 1, 2012, the maximum lifetime repayment period and the minimum instalment in effect for buybacks prior to that date has not changed. 

Service Buyback payments must be made on an on-going basis during your period of your leave without pay. Your payments should be sent directly to the Government of Canada Pension Centre. If payments are not made on a semi-monthly basis, you will have different options to repay your default payment; however, the amount to be repaid will include interest.

When on Leave Without Pay (LWOP), your payments should be sent directly to the Government of Canada Pension Centre. Interest will be charged on defaulted payments.

If you leave or retire prior to paying the cost of your Service Buyback in full, the required instalments will be deducted from your monthly pension benefit once your Service Buyback has been finalized. If your pension benefit is not payable immediately (within 30 days of termination of employment) you must remit your elective service payments directly to the Government of Canada Pension Centre; otherwise, interest will be charged on any defaulted payments. A default, which occurs over an extended period of time, will result in significantly higher minimum semi-monthly payments.

After choosing semi-monthly instalments, you may decide later to amend your method of payment. You may make a lump sum payment at any time. It will be applied to shorten your repayment period or, at your request, reduce your semi-monthly instalment amount. You may also increase your semi-monthly instalment amount at any time which will shorten your repayment period. The payment methods are flexible and you may choose any one or a combination of these options. However, you normally cannot reduce your semi-monthly payments nor can you extend the repayment period beyond the maximum permitted.