Elective service

Can I acquire elective service?

Yes, you can acquire elective service with Canada Post or the Post Office Department before you joined the Plan (or while you were a member, but were on leave).

However, there are types of service that are not eligible for election. These include periods:

  • where the service has not been previously recognized by the PSSA, Canada Post or the Post Office Department,
  • prior to January 1, 1981, if you worked part-time,
  • after December 31, 1980, where you worked part-time and were assigned to work less than 12 hours a week,
  • of strike, unauthorized leave, or suspension,
  • of leaves of absence before you started contributing to the Plan (with some exceptions), or
  • where you were contributing 1% to the PSSA before October 1, 2000, because you already had combined service of 35 years with the PSSA and the CFSA or RCMPSA pension plans,
  • where you were under age 18, if the service occurred between January 1, 1966 and September 8, 1993.

Note: For service where a commuted value was paid out under the Canada Post pension plan or the Public Service Superannuation Act (PSSA), you have one year from your Plan enrolment date to elect and pay for this service.

What are the advantages of acquiring elective service?

There are several:

  • you can reach 35 years of eligibility service sooner,
  • you may be eligible for an unreduced pension at an earlier age,
  • upon death, if payment is not complete, future monthly payments will be considered paid in full,
  • there may be tax advantages.

Are the payments tax-deductible?

Elective contributions may or may not be tax-deductible in full, depending on Income Tax Act rules, which are different for service before and after 1990. Tax issues are quite complicated. Once you have received the estimate of how much it will cost to acquire the service, you may want to see a professional financial advisor to look at tax questions and whether acquiring the service makes sense for you.

How much does it cost to acquire elective service?

How much you pay depends on:

  • how much service you are eligible for and want to acquire,
  • your basic pay when you last joined the Plan, if you choose to acquire the service within one year,
  • your basic pay when you acquire the service, if you choose to acquire the service more than one year after you last joined the Plan,
  • the interest calculated on the years between the elective service you're acquiring and when you choose to acquire it,
  • the pension and CPP/QPP contribution rates that applied when the service took place.

Where do I get an estimate of my cost to acquire elective service?

Contact the Pension Centre. You must provide the exact start and end dates for each period of service you want to acquire.

Do I have to pass a medical examination?

No, if you elect to acquire the service within your first year of Plan membership.

Yes, if you have been a Plan member for more than one year; you will have to pay the cost of the medical.

  • If you do not pass the medical examination, the cost of the elective service must be paid in full within 30 days or the service cannot be acquired.

How do I pay for my elective service?

You can pay:

  • by lump sum, either in cash, or by transferring funds from your RRSP,
  • by monthly deductions from your pay, or
  • using a combination of the two.

You start paying, as soon as you sign and submit the necessary forms.

If you choose monthly deductions, you pay an extra 4% a year in simple interest, plus a life insurance premium. If you die before payment is complete, the outstanding balance will be deemed paid in full.

What is the maximum payment period?

If your age at date of election is... The maximum payment period is...
age 45 or older 20 years
less than age 45 to age 65