Absences

Contents

Away from Work with Reduced or No Pay

A period of absence from work without pay can have an effect on a member's pension.

An employer's payments and information that must be provided depends on the reason for the reduction in pay.

If the reason for the absence is due to certified sickness, the pension benefits must be protected. Other authorised unpaid leave requires the member to take steps to restore the pension.

Statutory Protection for Pensions

Protection to LGPS pensions is offered by applying an 'Assumed Pensionable Pay' (APP). The APP value is based upon the previous 13 weeks or 3 months pensionable pay and is used for both the employer contributions and for the pension value going to the pension account at the end of the year.

For further details, please refer to the CARE Pay and Assumed Pensionable Pay page.

Sickness

If an employee moves to a period of reduced contractual pay or nil pay as a result of sickness or injury, you should report the APP for pension purposes.

The employee will pay contributions on any pensionable pay they receive during such periods of absence, and you will pay contributions on the amount of APP.

If the member was in the 50/50 section prior to dropping to nil contractual pay due to sickness, they should be returned to the main section from the beginning of the next pay period (provided they are still on no pay at that time).

If an employee commences relevant child related leave (i.e. ordinary maternity, paternity, shared parental or adoption leave and any paid additional maternity, paternity or adoption leave), you should apply APP for pension purposes.

The employee will pay contributions on any pensionable pay they receive during such periods of absence, and you will pay contributions on the amount of APP.

APP does not apply during any period of unpaid additional maternity, paternity, shared parental or adoption leave available at the end of relevant child related leave; this is to be treated as unpaid leave of absence.

Where a member works a Keep in Touch (KIT) day, Shared Parental Leave in Touch (SPLIT) day(s) or Stringer day(s) during a period of unpaid additional maternity, paternity or adoption leave, the member will accrue 1/49th of pensionable pay received for that day.

The member will pay basic pension contributions on the actual pay received and you will pay employer contributions on the actual pay received for these days.

Where a member doesn't have an entitlement to pensionable pay (including statutory pay) for any of their ordinary or additional period of maternity leave, they are treated for the purposes of the LGPS Regulations as if they had paid the contributions. Employers' contributions remain payable based on Assumed Pensionable Pay.

Unpaid Authorised Leave

If a member wishes to buy the pension 'lost' in respect of a period of authorised unpaid leave, for example Jury Service, they can do so via an Additional Pension Contribution (APC) contract. Please refer to the Additional Pension Contribution (APC) page.

A member may elect to repay the contributions and if they elect within 30 days of their return to work, the cost is shared between you and the member.

If the election is received within the 30 days of the member's return to work, or if you have agreed to a longer period, you must pay 2/3rds of the cost (shared cost additional pension contribution SCAPC).

You must have a published policy indicating under what circumstances you would extend the time, beyond 30 days from the return to work, for members to decide about restoring the pension after their time off with no pay. Both you and Pension Services must agree that the member's request is eligible before deductions can begin.

If the member wants to restore the 'lost pension' they must send you and Pension Services each a copy of the completed APC application.

If the member doesn't pay contributions for the period of absence, Surrey Pension Fund MUST be notified of the relevant dates using i-Connect via the monthly return facility, or by completing the Change of Details spreadsheet.

You should make the member aware, prior to the period of authorised unpaid leave, of the ability to buy 'lost' pension via an APC on their return.

On request, you will need to provide the member with the amount of APP for the relevant period. On receipt of an election by a member to buy 'lost' pension, you or your payroll provider must check that the amount the employee wishes to pay equates to the value of the 'lost' pension.

Emergency Volunteering Leave (EVL)

The Government has introduced a new volunteering scheme to allow the public to contribute to the coronavirus response. The scheme allows workers to take unpaid statutory emergency volunteering leave to volunteer in health and social care authorities.

If a member takes a period of EVL, their LGPS pension benefits will build up in the same way as if they were working normally.

The member will pay basic pension contributions on any pay received during a period of EVL and you will pay employer contributions on the APP.

Trade Dispute

Where a member is absent due to a trade dispute, they may choose to buy extra pension to replace the amount of pension 'lost' during the period of the trade dispute.

If a member wishes to buy the pension 'lost' in respect of trade dispute action they can do so via an Additional Pension Contribution (APC) contract. Payment of the APC is at full cost to the member and there is no time limit on when the member should make an election to pay.

Should the member take up the option of an APC contract to buy back the pension 'lost' during a period of absence due to industrial action, the value of the lost pay figure is based on the pay the member lost for that period of trade dispute absence. This is the figure that you should provide to the member.

Note that a member can commence an APC to purchase the 'lost' pension even if they are in the 50/50 section.

If the member is absent due to industrial action, APP should not be added to the pensionable pay cumulative for that period of absence.

Reserve Forces Service Leave

An employee on Reserve Forces Service Leave may elect to remain a member of the LGPS.

If they do so, you will need to calculate the APP whilst the reservist is on leave and submit this for the pension value going into the pension account at the end of the year, so that the member continues to build up a pension as if they were still at work. You would pay no employer contributions to Surrey Pension Fund on that APP.

You will need to notify the reservist and, via the reservist, the Ministry of Defence (MoD) of both the APP figure and the employee and employer contribution rate due on that amount, and the amount of any additional contributions being paid by the member. If the MoD pay is less than the member's pensionable pay (as defined in the 2008 Scheme), and the additional contributions are:

  • Additional Regular Contributions (ARCs),
  • contributions to purchase Added Years, or
  • Additional Survivor Benefit Contributions (ASBCs).

then the additional contributions are deemed to have been paid.

The MoD would deduct the employee contribution and any additional employee contributions from the reservist and pay those contributions, together with the employer contribution, directly over to the Surrey Pension Fund or to the AVC provider, as appropriate. Note that any employer contributions to a SCAPC or SCAVC remain payable by the employer.

If you continue to pay the reservist some pay whilst they are on reserve forces service leave, that pay is non-pensionable. Neither employee nor employer contributions should be deducted. Any pay paid by the employer is not added into the person's cumulative pensionable pay figure. Only APP is added into the cumulative pensionable pay during a period of reserve forces leave.

Useful links