DBplus purchases

How to get started with a purchase.

 

LIFE EVENTS

Why consider a purchase?

A purchase can be an effective way to consolidate your retirement savings into one secure, sustainable source: you’ll get a bigger DBplus pension, and may even be able to retire sooner than planned.

When you make a purchase in DBplus, you are adding an additional amount of pension to your lifetime pension. The purchased amount becomes part of your total pension – it will grow with conditional AIW increases while you work, and when you retire, it will be paid to you for the rest of your life.

The cost of a purchase will vary because each purchase relates to a specific period – either a leave or a past period of employment. The amount of pension you receive will also vary, depending on how close you are to your normal retirement date.

You can start a purchase any time until you leave your job or retire, but keep in mind that purchases take time. As a rule, the sooner you complete the purchase, the more pension you will get for it.

If you wish to purchase a leave period or statutory leave, you must contact your employer’s HR department to get started.

Building more retirement income: DBplus purchase

DBplus Purchases: Simplified

Complete your purchase in three stages

Although every purchase is unique, they each flow through three stages – Learn, Return and Earn.

If you’re just getting started, the Learn stage explains your purchase options, running an estimate and the application form that applies to your purchase.

As you move on in the process, the Return stage has instructions for completing and submitting the purchase application form as well as what to do with the purchase package you’ll receive from the CAAT Pension Plan.

If you’ve decided to make a purchase, the Earn stage helps you arrange for the transfer of funds with your financial institution and fill out government forms to complete your pension purchase. Then you’re all set to receive confirmation and future statements from CAAT.

You can purchase the period of membership with any Canadian registered pension plan as long as the funds have been transferred to a registered retirement savings account, such as an RRSP.

Who contributes: You are responsible for 100% of the purchase cost. Your employer does not contribute on your behalf.

Eligible funds: The funds for the purchase must come from a registered retirement savings account, such as an RRSP. If your previous membership was in a defined benefit plan, you must have transferred the value of that pension into such an account.

Maximum contribution: The maximum amount you can contribute for the purchase is based on 18% of your T4 earnings for the period you are purchasing, or the amount of funds in your registered retirement savings accounts, whichever is lower.

Timing of purchase: The amount of pension you receive is calculated using the purchase adjustment factor based on how close you are to the normal retirement date.

Purchase process: To start the purchase process, visit the DBplus Purchase tool and follow the instructions to get an estimate of the cost and the forms you’ll need to complete.

Exceptions

  • Periods of membership in Group RRSPs and Deferred Profit-Sharing Plans are not eligible for purchase in DBplus.

  • If your pension benefit is in a defined benefit pension plan, and still in your previous employer’s pension plan, you must transfer it to a registered retirement savings account before you can make the purchase in the CAAT Plan.

  • You cannot purchase pension earned prior to January 1, 1992 with another employer’s pension plan if it was a defined benefit plan.

If you were away from work on an approved leave of absence during which you did not contribute to the Plan, you can make a purchase for this period when you return to work.

The contributions are calculated using your deemed earnings during the leave period, and the contribution rate in effect during the leave.

Who contributes: You are responsible for 100% of the purchase cost. Your employer does not contribute on your behalf.

Eligible funds: The funds for the purchase must come from a registered retirement savings account, such as an RRSP.

Maximum contributions: The maximum amount you can contribute for the purchase is equal to the total member and employer contributions for the period, up to the allowable limits under the Income Tax Act, or the amount of funds in your registered retirement savings accounts, whichever is lower.

Timing of purchase: The purchase adjustment factor depends on the timing of your purchase:

  • If you make the purchase within six months after you return to work: The amount of pension you receive is calculated with a purchase adjustment factor of 100%, no matter how close you are to the normal retirement date (this is the same as having no purchase adjustment factor).

  • If you make the purchase more than six months after you return to work: The amount of pension you receive is calculated using the purchase adjustment factor based on how close you are to your normal retirement date.

Purchase process: To start the purchase process, contact your employer HR department.

Making the purchase during your leave through your employer (if applicable):

If your employer provides Supplementary Unemployment Benefit (SUB) Plan payments, your contributions may be deducted directly from these payments during the leave period. Your pension will continue to grow during your leave.

  • Who contributes: You make the purchase through regular deductions and your employer will make contributions on your behalf.
  • Purchase process: If this situation applies to you, contact your HR department for details.

If you are not entitled to such payments, or do not wish to have contributions deducted from your payments, you can make the purchase when you return to work. The process depends on the timing of your purchase.

Making the purchase within six months after you return to work:

The amount you can purchase is based on your deemed earnings during the period of leave, and the contribution rate in effect during the leave.

  • Who contributes: Both you and your employer contribute towards this type of leave.
  • Eligible funds: You can use cash for this type of purchase.
  • Maximum contributions: The maximum amount you can contribute for the purchase is equal to the total member and employer contributions for the period, up to the allowable limits under the Income Tax Act, or the amount of funds in your registered retirement savings accounts, whichever is lower.
  • Timing of purchase: The amount of pension you receive is calculated with a purchase adjustment factor of 100%, no matter how close you are to the normal retirement date (this is the same as having no purchase adjustment factor).
  • Purchase process: To start the purchase process, contact your employer HR department.

Making the purchase more than six months after you return to work:

  • Who contributes: You are responsible for 100% of the purchase cost. Your employer does not contribute on your behalf.
  • Eligible funds: The funds for the purchase must come from a registered retirement savings account, such as an RRSP.
  • Maximum contributions: The amount you can contribute for the purchase is limited to the calculated maximum, or the amount of funds in your registered retirement savings accounts, whichever is lower.
  • Timing of purchase: The amount of pension you receive is calculated using the purchase adjustment factor based on how close you are to the normal retirement date.
  • Purchase process: To start the purchase process, contact your employer HR department.

Any time that you:

  • Worked for an employer that participates in the CAAT Plan before joining the Plan
  • Were a member of the Plan, but terminated before vesting and took a refund of contributions
  • Were a member of the CAAT Plan, terminated, and transferred the commuted value out of the Plan
  • Had a period of grievance, if you have returned to work
  • Had a period of layoff, if you have been recalled.

Any periods of statutory leaves, as defined under the applicable legislation in your jurisdiction of employment. For example, family medical leaves or emergency leaves under the Employment Standards Act (Ontario), which include:

  • Family medical leave
  • Organ donor leave
  • Family caregiver leave
  • Critical illness leave
  • Child death leave
  • Crime-related child disappearance leave
  • Domestic or sexual violence leave
  • Sick leave
  • Family responsibility leave
  • Bereavement leave
  • Emergency leave, declared emergencies
  • Pregnancy leave *
  • Parental leave *

* Note that Pregnancy, adoption or parental leaves are statutory leaves covered under the Employment Standards Act, but they have different purchase processes. Refer to “Did you take pregnancy, parental or adoption leave resulting from the birth or adoption of a child?” for more information and to find the correct form to get started.

If your jurisdiction of employment is not Ontario, the Employment Standards Act (Ontario) does not apply to you. Contact your employer’s HR to determine if your leave is eligible under the applicable legislation based on your jurisdiction of employment.

If you make the purchase within six months after you return to work: The amount of pension you receive is calculated with a purchase adjustment factor of 100%, no matter how close you are to the normal retirement date (this is the same as having no purchase adjustment factor).

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