Purchasing Credited Service

Why would I consider purchasing service?

Credited service is a factor both in determining your early retirement eligibility (Rule of 80) and in calculating your pension benefit. Therefore all else being equal, the more credited service you have the sooner you will qualify for early retirement (meet your Rule of 80) and the higher your SHEPP pension benefit will be.

What service is eligible for purchase and how much will it cost?

Each month that you make required contributions to the Plan counts as one month of credited service. There are situations where Plan members may have service that is not credited. Such service can be purchased on either a prior service or current service basis.

Prior Service

Eligible prior service includes:

  • Non-pension plan service with a SHEPP employer: Service with a SHEPP employer during which you were not contributing to any pension plan, including SHEPP. This includes service with your employer:
  • before your employer joined SHEPP;
  • during which you weren't eligible to join SHEPP; or
  • during which you chose not to join SHEPP even though you were eligible.
  • Pension service with a former SHEPP employer: Service with a former SHEPP employer (before you started working for your current employer), during which you were contributing to SHEPP and for which you received a termination benefit when your employment ended.
  • Approved unpaid leave of absence: An approved unpaid leave of absence, including a maternity, parental, adoption or education leave, etc.

You can apply to purchase prior service at any time while you are an active SHEPP member. If you are thinking of purchasing prior service, you can estimate the cost by using the Prior Service Purchase Calculator on SHEPPweb. For help using the calculator, please watch our Estimating the Cost to Purchase Prior Service video on the Video Tutorials page. You can also request a cost quote be mailed to you by contacting SHEPP.

The cost to purchase prior service is actuarially calculated based upon your age and earnings.

For more information please refer to the Purchasing Prior Service Information Sheet.

Current Service

Active Plan members can purchase periods of leave of absence on a current service basis, meaning while you are on your approved leave. To purchase current service, you are required to remit both your share and your employer's share of required contributions through pre-authorised debit payments payable each month during your leave. You can estimate the cost to purchase current service by using the Current Service Purchase Calculator on SHEPPweb. To purchase a leave of absence on a current service basis you must submit the Leave of Absence Member Notification form provided to you by your employer, indicating your desire to have a cost quote prepared. SHEPP will prepare and mail you a cost quote and the relevant application forms to purchase your leave of absence. To be eligible, SHEPP must receive the completed and signed Pre-authorised Debit form and the Current Service Purchase Agreement within 60 days from the date your leave begins.

For more information please refer to the Current Service Purchase (Leave of Absence) Information Sheet.