Make a decision on buying service

Explore the factors involved when buying service and what you should consider. Buying service can potentially increase your future pension.

Tax considerations

When you buy service, the value of your pension increases. This can affect your tax situation and might change your RRSP contribution room.

The increased value of your pension counts against your RRSP contribution room for the year. That means if you buy service using cash, your contribution room will decrease. The amount of the decrease is based on the change in the value of your pension as calculated by Canada Revenue Agency.

We’ll inform you about the change by providing a past service pension adjustment, which you will see on a statement that we send to you.

If you buy your service using money transferred from an RRSP, your contribution room will not be affected.

You may want to seek advice from an independent financial planner before deciding to buy service.