Say "Hello" to leaves

October 24, 2012

Sometimes we need a break from work. Whether a leave is planned years in advance, or on short notice, taking time off doesn't mean your pension has to.

Buying back credit after an employer-approved leave maximizes the value of your pension. We launched a timeline of a typical buyback process and a Payment Planner that lets you create different payment plans, to see which, if any, fit within your personal reality.

Buying back credit after an employer-approved leave maximizes the value of your pension. Let's take a look at common types of leaves, and whether or not a buyback is necessary.

MATERNITY, PARENTAL AND ADOPTION LEAVES

If you have a baby, Ontario law entitles you to 52 weeks off, 17 of which are for recovery from giving birth, and the remaining for care of your baby in the first year.

Parental leave is also available to the parent that did not carry the baby, but wants to spend time with them in the first year. Generally, this leave is 37 weeks.

Ontario law also entitles adoptive parents 37 weeks to bond with a new family member, from the time that you take custody and care of that child.

For these types of leaves, you can buy back the credit for the time you were away. In fact, leaves for taking time off to care for a new baby make up nearly 60% of the buybacks we see at Teachers'.

EMPLOYER-APPROVED LEAVES

Each employer has its own unique set of criteria for granting employees a leave of absence. From our end we verify that it is, in fact, employer-approved.

Here are some examples of what employer-approved leaves may be for:

Maternity leave extensions

If you have a baby in April, coming back to work for the last two months of the school year might not make much sense. In these cases, you can apply to your employer to extend your leave until the end of the school year and start fresh in September. Some mothers also opt to extend their leave by an additional year.

Education upgrade 

Just because you work in education doesn't mean your own student days are over. Going back to upgrade to a Masters, for example, can be a full-time job in itself.

Elder care 

The number of seniors in Ontario is projected to more than double to about 25% of the population by 2036, according to the province's Ministry of Finance. As your parents age, you are likely to take on the added responsibility of caring for them. Elder care leaves will likely become more common as this demographic shift occurs.

Sabbatical

Taking a sabbatical might mean taking time to travel, to live abroad, to write that novel that's been percolating in your mind or to just mentally refresh yourself.

As long as you are not working for your employer during your leave, and your leave is employer-approved, regardless of the reason or duration, you can buy back the credit for the time off.

DEFERRED SALARY LEAVE

Deferred salary leaves are sometimes called x/y leaves. Here's an example of how one might work:

For a 4/5 leave, you work for four years, and your employer holds back 20% of your salary. You would take the fifth year off, and your employer would pay you the portion of your salary that was held back during those first four years.

While you're on leave, your employer continues to remit contributions to the pension plan on the basis of your full salary, provided you have worked for the employer for at least three years. No buyback is required where the leave meets the criteria.