Buy-back Basics

You may have some OMERS Plan service or refunded service with another pension plan that doesn't currently count as credited service. If you are an active OMERS member, you may be able to buy this service back and convert it into credited service, which increases your pension and may help you retire earlier without a reduction.

Types of service you can buy back

  • Refunded service after 1991 (including a waiting period) with another registered pension plan (see example 1 below)
  • Previously refunded service in the OMERS Plan (see example 2 below)
  • A waiting period to join the OMERS Plan
  • Eligible service with an OMERS employer
  • Transferred-in service shortfall (when the amount transferred in from another pension plan doesn't buy the same amount of service in the OMERS Plan)
  • A leave period where the purchase deadline has passed.

Examples of eligible service


Example 1
Alex worked for XYZ Corporation from 1985 to 1995, and was a member of the company's registered pension plan. When Alex left XYZ, he transferred the benefit he'd accrued during his 10 years with the company out of their plan into a locked-in retirement account (LIRA). He has the option to buy the portion of his service that occurred after 1991 (up to four years from 1992 to 1995) and convert it into OMERS credited service. To help pay for the service, he can use the funds from his LIRA.  

Example 2

Susan transferred the commuted value in respect of 3 years of service out of the OMERS Plan into a LIRA when she left her former OMERS employer. She recently started to work for another OMERS employer and the three years of service she transferred out of the OMERS Plan count as eligible service. Susan has the option to buy all or some of the 3 years of service back and convert it into credited service. To help pay for the service, she can use the funds from her LIRA.

Who can buy service?

You must be an active member to be eligible to buy service. OMERS retirees and survivors and members who leave their OMERS employer and keep their pension in the OMERS Plan (deferred members) do not have the option to buy service.

Things to consider about buying service

  • Is the increase in your pension worth the cost of the buy-back?
  • You can choose to buy back any or all of the service: it's entirely up to you. You may wish to consult a retirement planner or financial adviser.
  • As an active OMERS member, you can purchase service at any time. If you terminate your employment or retire, you must complete the purchase within 30 days of leaving your employer.
  • Previous service with an OMERS employer may count as eligible service in the OMERS Plan, even if you don't buy it back.

Other notes:

  • Money used to pay for the service you are buying could become locked in.
  • You cannot reverse your purchase; if you leave your employer, your options would be to keep your benefit in OMERS, or transfer it to another pension plan or locked-in retirement account (LIRA). You would not have the option of a cash refund.
  • If you still have a benefit in another registered pension plan, you may be able to transfer it into OMERS.
  • Effective January 1, 2020, if you rejoin the OMERS Plan after transferring your commuted value (CV) out of the Plan, you will have to wait five years from the transfer-out date of your CV before you can buy back the associated service.

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 simply put, what your future pension is worth in today's dollars with the added service.

You can use the Retirement Income Estimator on the myOMERS secure member site or call OMERS Member Services to see how buying service will increase your pension. When you know the cost and the increase to your pension, you can decide whether buying service is for you.

Purchase deadline

The cost of the service you want to buy will remain in effect for 6 months. After that, we must recalculate the cost, which will likely be higher. The cost increases as you get older, which reflects the increasing value of the benefit. 
If you leave your OMERS employer or retire, you must complete the purchase within 30 days of leaving your employer.
 

Service purchases and income tax

Buying service can affect your tax situation. Read more about Income Tax Considerations.