Increase your pension: understanding buybacks
When you're a member of the Medicus Pension Plan, your retirement benefit is based on a formula that considers how many years you participated in the plan. Generally, the longer you participate, the higher your pension.
If you’re a physician who was incorporated some time before joining the plan, a pension buyback is an opportunity to increase the annual pension you'll receive in retirement.
What is a pension buyback?
A pension buyback allows plan members to increase their secure monthly pension from Medicus by making a one-time transfer of assets into the plan to purchase additional pension for past years of service with their corporation (or another eligible participating employer). If you're an incorporated physician, the participating employer is your professional corporation.
Your pension income in retirement will be calculated based on your annual salary and how many years you’ve participated in the plan, so making up for past years can make a big difference.
When does a buyback make sense?
A pension buyback can make sense in cases where you are:
Joining the plan later in your career
If you joined Medicus mid- or late-career, a pension buyback allows you to catch up on missed service and boost your future pension in retirement.
Seeking more secure income in retirement
If you’re concerned about how market volatility will affect your retirement savings, increasing your secure pension will create a bigger safety net for your retirement savings portfolio.
How often can I do a buyback?
To complete a pension buyback, you first need to be a member of the plan. If you don't purchase the maximum additional pension you’re eligible for at your first buyback opportunity and another buyback window opens in the future, you may be able to take advantage of that opportunity as well.
How much additional pension can I purchase with a buyback?
The additional pension you can purchase depends on several factors, including how many eligible years you have (how long you were employed by your corporation or another participating employer before joining the plan), your salary during that period and your estimated years until retirement.
How is the buyback funded?
Depending on your circumstances, a Medicus pension buyback may be funded using:
registered retirement savings plan (RRSP) assets
corporate funds
personal non-registered savings
Your available funding options will be outlined in your personalized pension buyback options package.
When and how can I apply for a buyback?
To apply for a buyback, you must have:
eligible past service with your corporation (or another participating employer);
eligible pensionable earnings (meaning, you must have received salary and wages, including bonuses and excluding dividends, from your corporation in some or all those past years of service); and,
sufficient assets to transfer to the plan.
