Purchase Your Parenting Leave
When you’re on a parenting leave and any Supplemental Employment Benefits Plan payment to you has ceased, you don’t accrue pension service for the rest of your leave. However, you can purchase this service once you return from your parenting leave so that it still counts towards your pension.
Why should you purchase service?
• Purchasing this service may mean you can retire sooner, depending on when you started teaching.
• Purchased service is added to the service used to calculate your monthly pension payment, increasing your benefit.
When should you purchase your parenting service?
You should purchase your parenting leave service as soon as possible after your leave ends. Your cost is based on what you would have contributed during that time (right now that’s 10 per cent of your salary for a full year). A two-year, interest-free window on the cost of your leave starts when your leave ends.
After that, interest is charged – so the longer you wait, the more expensive it becomes. Here’s an example: A leave from about 20 years ago costs $4,400 before interest, but costs $15,000 today. That’s more than triple the initial interest-free cost!
How do you purchase your service?
• Make a lump-sum cash payment, or
• Transfer RRSPs, or
• Use your STRP voluntary contributions.
Retiring soon?
If you are considering retirement in the next few years, make sure you start the process of purchasing your parenting leave at least one to two years before your desired retirement date. The Saskatchewan Teachers’ Retirement Plan must apply to the Canada Revenue Agency for a Past Service Pension Adjustment before your service purchase can be processed and added in your pension record, which can take months to complete.
Contact the STRP to get a quote on the cost to purchase your parenting leave and to start the purchasing process.
Pro Tip: Save With Voluntary Contributions!
If you are planning a future parenting leave, you can start saving for it now by making voluntary contributions to the STRP. These contributions will earn the pension fund’s net rate of return. Visit the Voluntary Contributions page of the STF website for more information.