OMERS is pleased to offer its members a buy-back payment plan that can help make purchasing past service easier to manage. Members who are eligible to buy back service now have the option to pay for a buy-back in monthly payments over 12, 24 or 36 months, rather than a lump sum. This new option was launched May 11, 2009.
Buying back service increases a member’s credited service in the plan, which increases their lifetime pension. More credited service may help members retire earlier or with a smaller reduction. The service is credited as monthly payments are received.
“OMERS is committed to providing best-in-class pension services to our members,” said Jennifer Brown, OMERS Chief Pension Officer. “That includes providing the tools to help our members maximize their retirement benefit.”
OMERS buy-back payment options
· Members who are eligible to purchase service can make monthly payments over 12, 24 or 36 months by pre-authorized withdrawals from their bank account; or
· Members can pay the full cost in one lump sum (by personal cheque, transfer from an RRSP, transfer from another registered pension plan, or retiring allowance); or
· Members can pay using a combination of a lump sum (as above) for a portion of the buy-back and the monthly payment plan for the balance.
Purchasing past service
The types of service and the rules governing buy-backs have not changed. The cost of buying back service is tax-deductible, depending on the type of service and when it occurred.
The overall cost of a buy-back in monthly payments is higher than paying in a lump sum. This reflects the increasing value of the service during the repayment period.
Types of purchasable past service
A member can purchase service with an OMERS employer that doesn’t already count as credited service. This includes:
· leaves of absence (such as pregnancy/parental or unpaid vacation leaves) not purchased before the leave period deadline;
· most other types of service with an OMERS employer during which the member didn’t contribute to the plan; and
· previous OMERS credited service that the member had refunded.
· Members may also be able to buy some types of Canadian public sector service outside OMERS.
Questions?
For more information about buying back service, please click on a link:
Buy-back basics
Purchasing previous service
Income tax deductibility & PSPAs
Buy-back Estimator
Or contact OMERS Client Services at 416-369-2444 or toll free 1-800-387-0813 or e-mail client@omers.com
