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 meaning of vesting of employer contributions in s. 60(j.1)(ii)(B) as follows:
Where an employee buys back years of past service, we consider that employer contributions vest for each buy-back year. Consequently, an employee is not entitled to the additional $1,500 in clause 60(j.1)(ii)(B) for those years.