Absence and pensions contributions

There are all kinds of reasons why we may be absent from work such as illness, child related leave, strike breaks and unpaid leave. How this may affect your pension is explored below.

To make up for 'lost' pension from these periods of absence, you may consider paying additional pension contributions (APCs) either regularly over a number of complete years, or as a one-off lump sum.

To find out the cost of paying APCs, use the link on the right hand-side of this page to access an online calculator, and if you want to go ahead, make an application. You can find more information on how to use APCs to buy back lost pension on our AVCs and SCAVCs webpage.  

Strike action

You won’t pay pension contributions whilst you’re away from work due to strike action. However, you can choose to pay additional pension contributions (APCs) to purchase the amount of pension lost. 

The online calculator on the LGPS member website can work out what the cost will be. To use the calculator, first you'll need to contact your employer to find out the amount of pay lost due to strike action.

You can pay APCs to cover a period of lost pension through strike action at any time whilst you're an active member of the LGPS. 

Sickness absence
If you’re on reduced pay due to sickness, you’ll carry on building up your normal pension benefits. We use an ‘assumed pensionable pay’ to work out your benefits to make sure your pension is unaffected.
If you go onto unpaid sick leave you'll not pay any pension contributions. However, to make sure you don’t lose out, we'll work out your benefits based on your 'assumed pay' for that period.
What is assumed pensionable pay?
First, to work out your annual pay, we work out your average pay over a period before the reduction in pay (the period is 12 weeks or 3 months, depending on how you’re paid). This annual pay is then used to work out the assumed pay for the period you were on reduced or no pay. For example, if the annual pay figure was £12,000, and you were on no pay for three months, the assumed pay for this period of absence would be £3,000. It's your employer’s responsibility to provide us with the correct assumed pay figures. 

Child related leave (maternity. paternity, shared parental, or adoption leave)

During any period of child related leave such as, paid maternity or paternity leave (including any period when only statutory maternity or paternity pay is paid), or paid adoption leave (including any period when only statutory adoption pay is paid), your pension is worked out using your assumed pensionable pay. Your LGPS benefits will continue to build up as if you were working normally and receiving full pay. The assumed pensionable pay is used so your pension is unaffected by the reduction in pay.

However, any period of unpaid maternity or adoption leave beyond the 26-week ordinary maternity, paternity, or adoption leave, will not count for pension purposes and will be considered authorised unpaid leave (more information below).

Authorised unpaid leave (including jury service)

During any period of authorised unpaid leave (leave your employer has allowed), you will stop paying pension contributions. You can choose to pay additional pension contributions (APCs) to buy back this lost pension. The cost of paying back is based on the last rate of pay you received (ignoring any increase in pay due to working a ‘keep in touch’ day).

If you want to buy the amount of lost pension for a period of child related or authorised leave and do this within 30 days of returning to work, then the cost of the APC is split between yourself and your employer. You will pay one-third of the cost and your employer will pay the rest. This is known as a shared cost additional pension contribution (SCAPC). You can pay these additional contributions in a one-off lump sum or through regular payments from your wages.

The maximum period of absence you can choose to buy back by a SCAPC is a period of three years.

Unauthorised unpaid leave

During any periods of unauthorised unpaid leave you stop paying pension contributions, so you don’t build up any pension, and there is no option to buy back the lost pension.

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01743 252130

Write to us

Pensions, PO Box 4826, Shrewsbury, SY1 9LJ
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