Buying the Service Adjustment

You can buy the service adjustment as long as you are an active member.

What am I buying?

When your normal retirement age changes from 65 to 60, OMERS applies an adjustment to your past credited service. Your past credited service is reduced by up to 25% because you are now eligible for normal retirement age 60 benefits if you retire or leave your OMERS employer. You are buying the service adjustment and converting it into normal retirement age 60 credited service.

Example

  • Dev is 45 and has 20 years of credited service when his normal retirement age changes from 65 to 60.
  • An adjustment is applied to his normal retirement age 65 credited service and his credited service is reduced by 5 years.
  • Dev now has 15 years of normal retirement age 60 credited service.
  • Dev can buy none, some or all of the 5-year service adjustment and convert it into normal retirement age 60 credited service.

What happens if I don’t buy the service adjustment?

1. The service adjustment counts as eligible service, even if you don’t buy it.

Example

If Dev in the above example does not purchase the 5-year service adjustment and convert it into normal retirement age 60 credited service, it would count as 5 years of eligible service.

2. You can choose to buy none, some or all of the service adjustment. Whatever you decide, please note that the cost is valid for six months. If you do not make your election or pay for the service adjustment by the expiry date on the election form, you can contact OMERS Client Services to request an updated cost.

3. The cost to buy the service adjustment changes as you get older:

  • Generally speaking, the cost will increase as you approach the age you become eligible for an unreduced normal retirement age 60 pension. Then, the cost typically starts to decrease and will reduce to zero around the age you become eligible for an unreduced normal retirement age 65 pension.
  • The cost is based on a number of variables, including your age and salary and the actuarial assumptions in effect at the time the calculation is performed. A change to any of these variables may increase or decrease the cost. More about the cost

4. OMERS automatically restores any service adjustment if you are an active member when the cost has reduced to zero.

5. If you retire or leave your OMERS employer and you still have a service adjustment on your record, you are given a final opportunity to buy it. (This opportunity is not available to your survivors in the event of your death.)

Why buy the service adjustment when:

  • the cost may decrease at some time in the future?
  • OMERS automatically restores the service adjustment if the cost reduces to zero while I’m still an active member?

Buying the service adjustment is similar to buying insurance. For example, many people buy home insurance and never claim on it. Although there is no refund of premiums for not making a claim, they continue to buy the insurance to protect themselves against future events they can’t predict. For the same reason, you can’t always predict when you will retire or terminate employment from your OMERS employer or you may become disabled or die before the cost of the service adjustment starts to decrease.

If you buy the service adjustment (either now or at some future date), the extra credited service will be added to your record immediately with the purpose of providing a higher benefit in the event of your retirement, termination from your OMERS employer, disability or death. However, the risk of purchasing the service adjustment is similar to purchasing insurance – there would be no refund of your payment if you continue to work to a point when the cost reduces to below what you paid or may even reduce to zero.

What are my payment options?

Your payment options include:

• Personal cheque payable to OMERS (OMERS will issue a tax receipt for the payment received). 
• Transfer from a registered retirement savings plan (RRSP) or locked-in retirement account (LIRA). 
• Transfer from another registered pension plan (RPP). 
• Withdrawal from your OMERS Additional Voluntary Contributions (AVC) account.

Can I buy the service adjustment after my pension starts?

No, you cannot buy the service adjustment after your pension starts.

Can I get my money back if I change my mind after paying for the service adjustment?

No, the purchase is irreversible. Keep in mind that purchasing the service adjustment is similar to purchasing insurance – if you continue to work to a point when the cost would have otherwise reduced to below what you paid or may even reduce to zero, there would be no refund of your payment.

How can I request a cost to buy the service adjustment?

OMERS automatically provides a cost at the time your normal retirement changes from 65 to 60. The cost is valid for six months. After six months, the cost expires. If you still wish to buy the service adjustment, you would have to request an updated cost which could be higher or lower. More about the cost