Buying credit under the "other employment" provision is expensive. That's because the cost is based on the expected future improvement in your Ontario Teachers' pension due to the buyback. The cost reflects such things as your salary, your credit and the features of this plan, including early retirement options, inflation protection and survivor benefits.
Because Ontario Teachers' tends to offer better benefits than most other pension plans, you'll likely have insufficient funds in your former pension plan to purchase the same amount of credit in this plan. Usually the difference is substantial.
To help you decide whether or not to proceed with a buyback, you can contact us to obtain a cost quote and an estimate of how much credit your transferred funds will buy in this plan.
Not enough funds?
If the cost to buy back is more than the funds available for transfer, you have the opportunity to pay for the difference.
Let's assume Maria contributed to her former pension plan for eight years and she has $30,000 available to transfer. Let's also assume that it will cost $120,000 to buy the same eight years of credit in this plan. Maria can:
- Pay the $90,000 difference and receive eight years of credit in this plan.
- Pay none or only some of the difference and receive less than eight years of credit.
Deadline for paying the difference
You have 60 days after the transfer of funds to pay the difference. If you miss the deadline:
- For service before 1992, you forfeit the opportunity to buy back the credit.
- For service after 1991, you can buy back all or part of the credit after the deadline.
However, the cost will be based on the expected improvement in the future value of your pension at the time you plan to make payment.