Customizing your buyback
September 07, 2012
As Laura Reynolds ends her maternity leave, she contemplates buying back credit in the Teachers' pension plan. Laura, a secondary school teacher with the Toronto District School Board, took a year off after her son Nathan was born.
"There are a lot of factors to weigh. We have had to rent to a bigger – and albeit more expensive home – and now we are also facing daycare bills," Laura says. "To say it's a hairy time right now is a big understatement."
On the other hand, "I know maximizing credit in the pension plan is a really important investment to make over the long term."
Recently, we launched a buyback payment planner iniAccess Web, our secure member website. The tool allows members on an employer-approved leave to create various scenarios. Laura can see what the cost of her buyback would be if she were to pay for it in one lump sum, or spread the payments out over a maximum of five years.
Since its launch in August, more than 400 members have logged in toiAccess Web to check the tool out.
"I also used the buyback timeline to learn how the process works. The timeline gave me the big picture. Now, I need to log in and use the payment calculator to determine what will be best for my personal circumstances."
Many factors come into play, she continues. "We'd like to have a second child in the next few years. That would mean two leaves within a five-year span. Do I just buy back one of those leaves? Can I afford to buy back both? Does it make more sense to buyback credit from my first leave before I even begin my second?"
And with an expanding family, she and her husband also hope to purchase a home, adding another factor into the mix for consideration.
"I've decided to take a year and see where the dust settles financially. But having these tools available certainly helps to ensure that when I do decide whether or not to buy back credit for my leave, it'll be an informed decision and one that's best for our reality."