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Maximizing your pension

Buying service

Purchasing past service from your previous or current employer can increase your total pension amount and may help you retire earlier. 

Purchasing past service with an OMERS employer or transferring in funds from a defined contribution (DC) pension plan, also referred to as a buy-back, can increase your pension. For example, if you worked as a lifeguard for a municipality but didn’t enrol in the OMERS Plan, you may be eligible to buy back that service.

Eligibility 

You must be currently employed by an OMERS employer and contributing to the Plan or on a disability contribution waiver to be eligible for a buy-back. 

If you are retired, a survivor or a deferred member (someone who left their OMERS employer but kept their pension in the Plan), then you do not have the option to purchase past service. 

If you rejoin the Plan after transferring out your commuted value (CV), you will have to wait five years from the transfer-out date of your CV before you can buy back the associated service. 

Types of service purchasable through a buy-back 

You can purchase past service from both OMERS and non-OMERS employers if you were part of a defined benefit (DB) or DC registered pension plan (RPP) during the relevant period or in the waiting period to join. Funds being transferred from a DC pension plan are accepted through the OMERS buy-back process. 

Group RRSPs are not RPPs and service with a prior employer that offered participation in a group RRSP is not eligible for a buy-back with OMERS.

Service with an OMERS employer

When you purchase service with an OMERS employer, you can buy the time that you were employed and reporting to work, increasing your total pension amount. For example, if you were a part-time employee of an OMERS employer who worked two days a week (40% of a full-time schedule) and did not immediately join the OMERS Plan, you can purchase the period of time that you were scheduled to work during this period. The rest of the time (60% of the time you were employed but not scheduled to work) can be added as eligible service to your member record to help bring you closer to an earlier unreduced retirement date. 

Service with a non-OMERS employer

Purchasing service from a non-OMERS employer adds credited service to your record, thereby increasing your total pension amount, and may help you retire earlier with an unreduced pension or smaller reduction. 

If your non-OMERS employer provided a DC plan, a specified multi-employer plan or your prior DB plan was transferred to a locked-in account or RRSP, you may purchase that service.

If your previous employer’s pension plan was a DB plan and you left your pension in that plan, you may be able to transfer that service.

Identifying purchasable service

If you are unsure if you have service you can buy back, ask yourself the following questions: 

  • Did you work for another OMERS employer? 

  • Did you participate in a prior employer’s DC pension plan? 

  • Did you have to wait to join a non-OMERS employer's DB or DC plan in the past and not purchase that waiting period? 

  • Did you cash out or transfer a pension from a previous employer’s pension plan after 1991? 

  • Did you take a leave (e.g., parental leave) with an OMERS employer but didn’t purchase the leave before the deadline? 

  • Did you transfer service from another pension plan into the OMERS Plan that resulted in a shortfall (i.e., where the amount transferred in didn’t buy the same amount of service in the OMERS Plan)? 

If you answered “yes” to any of these questions, you may be able to buy back service. 

Missing service 

If you think you have eligible service that is not on your OMERS record, let us know as soon as possible.

Have your previous employer (where the service occurred) complete a Form 168 – Proof of Eligible Service or send us a Form 169 – Statutory Declaration for Proof of Eligible Service and include the required supporting documents.

Past service or missing service with an OMERS employer may count as eligible service in the Plan even if you don't buy it back. Some, if not all, is purchasable through a buy-back. Double-check your most recent Pension Statement to see if the service is accounted for or not. 

Review your options as soon as possible. In many cases, your buy-back cost will increase over time, particularly as your earnings grow or you get closer to retirement age. 

Steps to buy back service 

Payment options for buying service

OMERS offers flexible payment options to help you buy back purchasable service: 

  • Pay the full cost of the service in one lump sum 

  • Pay over 12, 24, 36, 48 or 60 months through a monthly payment plan 

  • Pay through a combination of a lump sum and a monthly payment plan 

Lump sum payments

You can make lump sum payments to purchase your service through a personal cheque payable to OMERS (you will receive a tax receipt) or a transfer of funds from an RRSP, Locked-In Retirement Account (LIRA), Additional Voluntary Contributions (AVC) account or another RPP. 

OMERS monthly payment plan

Monthly payments can make it easier to manage the cost of buying back service. Payments are made over 12, 24, 36, 48 or 60 months through pre-authorized debit withdrawals from your bank account. You will be charged an annual interest rate on your payment plan. The service is added to your record as your monthly payments are received. 

If you want to stop payments during the payment period, or if there is still service remaining at the end of the period, OMERS can recalculate the cost and set up a new monthly payment schedule for you. 

Ready to get started? 

Register or sign in to myOMERS today to confirm your service, get a buy-back estimate and request a costing.

Get a buy-back estimate

Things to consider before you buy back service 

It’s important to consider how buying past service fits with your retirement plans. In some instances, the increase to your pension in retirement or — if you don’t plan to stay with your OMERS employer until retirement age — the refund of your pension value may not justify the cost of buying the purchasable service available to you. Speak to a financial planner to see if it’s right for you. 

The cost of buying service

Your buy-back cost is based on factors such as your age, salary and when the service occurred. The cost of the service is its “actuarial value” or what your future pension is worth in today’s dollars with the added service. 

Use the Retirement Planner tool in myOMERS or contact OMERS Member Experience to see how buying service may increase your pension. 

Purchase deadlines

Your buy-back costing will remain in effect for six months. If you decide to proceed with the purchase after this time, we must recalculate the cost of your buy-back, which will likely be higher. The cost typically increases as you get older, which reflects the increasing value of the benefit as you approach retirement. 

If you leave your OMERS employer including to retire while you are in the process of completing a buy-back, you must complete the purchase within 30 days. 

Other considerations

  • You cannot reverse your purchase. Money used to pay for the service you are buying becomes locked-in.

  • If you leave your employer before your early retirement date, you have the option to keep your benefit in the OMERS Plan or transfer it to another pension plan or LIRA, however, you would not have the option of a cash refund. 

  • If you leave on or after your early retirement date, you become eligible to retire and start receiving your OMERS pension, provided there is a complete end to the employment relationship. 

  • Some service with an OMERS employer, excluding certain leaves of absence, that is eligible for a buy-back counts as eligible service even if you do not purchase it. Other types of purchasable service like service under another RPP or certain leaves of absence will only be recognized if you purchase it. If you have both types of service, you may wish to prioritize purchasing the second type to grow your pension and help you reach an unreduced early retirement date faster.

  • Service purchased through a buy-back is not considered under the OMERS Retirement Compensation Arrangement since earnings after a certain limit are not recognized on buy-back service. 

Income tax considerations and restrictions 

The Income Tax Act (ITA) governs the service you can buy in the Plan, methods of payment, maximum purchase limit and deductions you may be eligible for when completing a purchase.  

The ITA also contains restrictions on how you can pay for a buy-back. Depending on your available RRSP room, some periods must be paid for through a transfer of funds from an RRSP, LIRA or RPP. When you request a costing, the buy-back package outlines any payment restrictions that apply to your past service. 

There are also limits on the amount of the benefit you receive for the service you buy back. For example, service after 1991 has an annual limit that changes each year (in 2025, this limit is $3,756.67). 

Eligible deductions 

The source of the funds used to purchase your past service will have certain tax implications:

Transfer from a registered retirement savings vehicle

Funds transferred into OMERS from your AVCs, RRSP, LIRA or RPP are already tax-sheltered. You cannot claim them again as a tax deduction for a service purchase. 

Cash payment

If you pay for the service purchase in cash (i.e., by personal cheque or through a monthly payment plan), all or some of the amount may be tax-deductible, depending on when the service occurred. The annual interest for the monthly payment plan may be tax-deductible. 

If you borrow money from a financial institution to purchase service, the interest is not tax-deductible. OMERS will issue a tax receipt for the amount received in each tax year. 

Service purchases and tax deductibility 

The cost of buying service may be tax-deductible and could affect your RRSP room depending on the type of service, when it occurred and how you pay for it. The tax deduction applies in the year the payment is made or may be carried forward to apply in subsequent years. 

When the service occurred

Portion of the cost that is tax-deductible

Deduction limit per year

Carry-over

Service period after 1989

Total cost

No limit for the year of purchase

No carry-over

Service period before 1990 while you did contribute to an RPP

Total cost

Lesser of the amount paid or carried forward or $3,500 minus all other OMERS contributions

Carry-over the deduction until the balance = $0

Service period before 1990 while you did not contribute to an RPP 

Lesser of the total cost or $3,500 x years or part-years purchased 

Lesser of the amount paid or carried forward or $3,500 

Carry-over the deduction until the balance = $0