Maximizing your retirement
…with voluntary contributions
If you are an STRP member who is actively teaching, you can choose to make voluntary contributions* to your own personal voluntary contribution account to help build your retirement savings.
When you retire or terminate from the Plan, you can choose to transfer the funds in your account to a personal RRSP or receive them as a taxable lump sum. You are also eligible to withdraw the funds on December 1st of the year you turn age 71.
Making voluntary contributions is easy – once you’ve completed an application form, the additional contributions simply come off your pay as an automatic payroll deduction. Or you can make contributions in lump sums. Fill out and submit a calculation request form to the STF to get started!
Voluntary contribution account: key features
It’s an account that grows over time
Your voluntary contributions are deposited into an account in your name – this account grows over time through contributions and investment returns.
You don’t need to worry about investing
Your voluntary contributions are invested in the pension plan’s investment funds. They benefit from the pension fund’s net rate of return, lower investment fees and access to professional fund management.
Use your voluntary contributions to purchase service under the STRP
Your voluntary contributions can be used to purchase eligible service for periods of time when you are away from work and not earning service (e.g., maternity/ paternity leave). This increases your monthly pension and may help you retire earlier with an unreduced pension.
Contributions offer tax savings
Your voluntary contributions are tax-deductible, which means you don’t pay income tax on them until you begin withdrawing funds in retirement.
*Note: contributions for any one calendar year cannot exceed the annual maximum limit allowed under the Income Tax Act. To determine how much you are able to contribute, fill and submit a quote request form to the STF.
Did you know? You can transfer funds from another registered retirement plan to your voluntary contribution account any time while you are under a teaching contract or receiving benefits from the Teachers' Long-Term Disability Plan. For more information, contact the STRP.
…by purchasing your leave of absence
When you take a leave of absence, like a maternity or paternity leave, you do not contribute to the Plan. This means you’re not earning pension service during your leave, which impacts your monthly pension at retirement.
But there’s good news - certain periods of leave may be eligible for you to purchase when you return to work.
There are three ways to purchase your eligible leave:
Make a lump sum payment (provided you have enough RRSP contribution room)
Hint: See your most recent Notice of Assessment, which was provided to you after you filed your income taxes to determine your unused RRSP contribution room.
- Transfer funds from your RRSP.
Use voluntary contributions that you have previously made to the Plan.
Some types of leave can be purchased without paying interest if you purchase within the one-year window after your leave ends. Following this one-year window, interest is charged retroactively and will continue to be charged in the future.
To calculate the cost of purchasing your leave, contact the STRP.
Avoid interest – purchase your service as soon as you can
…by purchasing outside service
You can also purchase additional years of service earned with another employer to increase your monthly pension at retirement and potentially retire earlier with an unreduced pension.
There are a few different types of service that qualify – check them out on the STF website.
Contact the STRP to request the cost of purchasing service. Once you get a quote, you can use the Pension Estimator to see how purchasing service can increase the monthly pension you will receive when you retire.
…by transferring service from other pension plans
The STRP has agreements with many other provincial teachers’ pension plans and registered plans in Saskatchewan that may allow you to transfer service from one registered plan to another, according to certain rules.
If you have service with another registered pension plan, you may be able to transfer it into the STRP and possibly retire earlier and/or with a larger pension. Contact the STRP to inquire about your options.