After a unionized employee filed a grievance for wrongful dismissal, the employer will pay the employee a lump sum so that the latter can make a contribution to a registered pension plan in order to buy back past years of service, as a result of which the employee can retire without penalty. In the course of a general discussion of s. 60(j.1), CRA commented on the application of s. 60(j.1)(v) to such buy back:
Where the employer's pension plan takes into account part of the years of service with a previous employer (for example, because of buying back the years of service), all years of service with the former employer may be included in the total number of years to be considered for the purposes of computing the amount eligible for a deduction by virtue of paragraph 60(j.1).