Dealing With Absences
These pages are for employer use only. Member information can be found on the home page.
There will be times when members of the scheme are not at work because of an absence. From 1st April 2014 the regulations changed and there is no longer the requirement to take the first 30 days of contributions when a member is absent.
There are many reasons why members may be absent from employment through authorised and unauthorised leave. The types of absence are listed below:
- Unpaid leave of absence
- Paid child related leave (including any period when only Statutory Maternity or Paternity, Adoption Pay is paid)
- Any unpaid child related leave
- Strike break because of a trade dispute
- Sick absence
What happens if a member is off sick?
During a period of sick leave members benefits will continue to build up as if they were working normally and receiving full pay. Employers contributions should still continue in full and employee contributions should continue on any pay the employee receives whilst they are off sick. If an employee moves onto unpaid sick leave, they will not pay any contributions – please note that employer contributions should continue as normal.
What pay is used to calculate benefits if the member leaves the LGPS and has been on reduced/no pay?
See the section on Assumed Pensionable Pay.
What options do members have to cover the cost of ‘lost’ pension due to absence?
Depending on the type of absence the member has two options:
- Additional Pension Contributions (APCs)
- Shared Cost Pension Contributions (SCAPCs)
If a member goes on strike they can elect after the absence, to cover the cost of ‘lost’ pension via an Additional Pension Contribution (APC) either paid regularly or as a one-off lump sum. For trade disputes (and any other unauthorised absences), the APC will always be fully funded by the member regardless of when they make the election.
What do employers need to do during strike action?
1. Inform members of the LGPS who are absent from duty because of strike action, of their right to purchase the amount of pension ‘lost’ during the trade dispute period. The implications of not opting to pay the contributions should also be pointed out.
2. If a member wishes to calculate the ‘lost’ pension then employers are required to let them know they can do this via Additional Pension Contributions (APCs) and that they can use the modeller online to calculate the cost. The modeller does require the member to provide a figure of the pay lost to see how much they will need to pay to cover the absence. This will mean that employers must provide the lost pay to any members who ask. In addition they must also calculate the payment for any members who don’t have access to the internet modeller. If the member wishes to cover the absence, the form is held online for them to complete and send back to their employer and a copy to the Pensions Team.
Action: Employers are required to let the Pensions Team know who has gone on strike and elected to repay the contributions via an APC or conversely if no employees went on strike then to confirm a nil return.
Please note: If the Pensions Team do not receive notification that the employee has elected to purchase the ‘lost’ pension then the assumption will be that the strike day will not count for pension purposes. This is particularly important for members with pre 1st April 2014 service as lost membership still affects these benefits.
3. Employers can, if they wish to, use a standard letter to provide a notification to a member who has elected to make a payment to cover a period of absence. A letter has been provided by the LGA in Annex 2 of a recent Circular.
4. You should confirm a nil return or send a list to the Pensions Team of all Scheme members who were absent due to a trade dispute showing their name, NI number, payroll number(s), unique identifier(s) of the post(s) in which the employee took industrial action (if the employee holds more than one job with the employer) and the date(s) of absence. A spreadsheet should be used when confirming to the Pensions Team who were absent and the preferred spreadsheet template to use can be found here. Please send the spreadsheet to email@example.com ensuring you follow information sharing guidelines and apply password protection as it will contain personal data.
Unpaid child related or unpaid authorised leave
When an employee is absent from work and wishes to cover a period of unpaid child related/or authorised unpaid leave they have the option to pay either a Shared Cost Additional Pension Contribution (SCAPC) or Additional Pension Contributions (APCs) to replace the ‘Lost Pension’.
For authorised unpaid leave, members’ have the option of paying Shared Cost Additional Pension Contributions (SCAPCs) to cover their ‘lost’ pension within 30 days of their return to work– this option must be brought to their attention if at all possible prior to the absence. If they elect to do this within 30 days of returning to work, then the employer will cover 2/3rds of the cost with the remaining 1/3rd being covered by the member via a Shared Cost Additional Pension Contribution (SCAPC). If they don’t elect to do this within 30 days of returning to work then this is solely funded by the employee.
Please note employees who do not elect to purchase their lost pension within 30 days of returning to work, cannot elect for a SCAPC outside of this time limit and there is no obligation for employers to extend this period. In order to allow your employees to elect for a SCAPC in the event that you haven’t informed them that they had to elect within 30 days of returning to work, you may wish to consider adapting your Pension Policy on offering SCAPc’s to allow a SCAPC in these circumstances only.
What do employers need to do?
- Inform all employees that when they return to work they have the option of paying Shared Cost Additional Pension Contributions (SCAPCs) to cover the ‘lost’ pension if they make the election within 30 days of returning. Employees should also be informed that the APC or SCAPC deduction amount can be calculated by using the online calculator and a form is available via the calculator should they wish to pay. If they do wish to pay then they can do so by regular payments (depending on pay frequency) or by a single lump sum.
- If your employee does not have access to the calculator then you will need to undertake the calculation on their behalf. You will need to provide the employee with Assumed Pensionable Pay for the unpaid period.
- Once you have received the completed form you will need to make the appropriate adjustments to payroll, ensuring that the payments are sent across to us and the details of the payments are entered on the monthly contribution return. If the member is making regular payments, you will need to enter the end date of the contract onto payroll. Please also send us a copy of the member’s form.
- Once the employee has returned from absence the Pensions Team should be notified on form PEN004.
LGPS Online calculator (Please be aware this hyperlink links to the National LGPS member site)