Buyback tables to be updated and process simplified

If a member is considering buying back past service, there are two changes planned for 2008 that the member should be aware of.

Tables updated

The tables on hoopp.com showing the approximate cost of buying back service will be updated effective Jan. 1, 2008.

An insert mentioning this fact will be included with all copies of A Guide to Past Service Purchases that are shipped after Jan. 1, 2008. Reference to the updated tables will also be made in a Primer Alert broadcast e-mail (to employers) and the next edition of Pension Update, the member newsletter.

Quote process simplified

Effective April 1, 2008, the rules governing buyback quotes will be simplified. When a quote is issued, it is good for 90 days. After that time, it expires, and the member must get a new quote. This change may, however, increase the cost of a purchase for some members, primarily those who have just enrolled in HOOPP or returned from a leave anytime within the last two years before April 1, 2008. It is therefore more important than ever to buy back service as early as possible, as the cost will increase as the member gets older, earns more, and builds more service.

There are also two changes to be aware of, both effective April 1, 2008 as well. These are of interest to anyone considering buying back part-time or RCA-related service:

• members will have a choice whether or not to buy the portion of their benefit related to HOOPP’s retirement compensation arrangement (currently, members are required to buy back RCA-related past service when they buy back registered pension plan-related service)
• part-time past service will include full eligibility service – this is important for any member who is contemplating retirement before age 60 (currently, if a member purchases part-time service, the eligibility service is also part time)

HOOPP is updating its buyback communications materials to reflect these changes.

What is buying back service?

HOOPP allows members to “buy back” eligible periods of time in the past, so that the service they purchase can count towards their HOOPP pension.

Two types of past service are eligible for purchase:

• HOOPP service: A period of time when the member was employed by a HOOPP employer but not enrolled in the Plan, a period when the member was on a leave and not making contributions, or a period of former HOOPP service for which the member received a benefit.
• Other service: Service with other pension plans may be eligible for buyback. Examples include service with an employer that has now joined HOOPP, or pension benefits a member transferred out of a plan.

Posted December 2007