Little leaves, big impact

April 02, 2015

Remembering what we did a month or a week ago can be tricky, never mind up to five years ago. It's no wonder that sometimes people forget about short unpaid leaves until it's time to apply for their pension.

Remember: Beginning with the 2014/15 school year, you don't have to buy back short unpaid leaves. Learn more here.

The impact to your pension can add up.

Let's take a look at two examples, based on the types of scenarios we see:

  1. Kate earns about $37,000 a year. She took a one-day, unpaid leave in 2010. Her buyback will cost about $25 and increase her future pension by roughly $5.50 a year, before deductions.
  2. Billy earns around $96,000. He took six days of unpaid leave in 2013. The cost of his buyback is just under $400, and it would increase his future pension by about $60 a year, before deductions.

These figures may not seem like much. Consider the big picture when deciding whether or not to buy back. Here are three things we want you to think about:

  1. How long will it take you to recoup the cost of the buyback once you retire? Kate will recoup hers after five years on pension and it will take Billy about seven years. Our members, on average, collect a pension for about 30 years.
  2. Increasing your pension means that your survivor pension also increases.
  3. You have five years to buy back a leave from the time it ends or before your first pension payment, but the sooner you do so, the less interest you'll have to pay