In this section, you can find information on how different types of paid and unpaid leave may impact or effect your Local Government Pension Scheme (LGPS) contributions and pension. You can also discover the ways in which you can buy back or reclaim any pension that you may lose over absence.
During any period of paid or unpaid sickness, the period of sick leave is treated as if you had been paying your pension contributions in full. This means your membership is unaffected.
If you do not pay contributions for a period of absence other than sickness, you would lose the accumulated pension for this period.
Other than sickness, there are lots of reasons why you could be on unpaid leave. For example, you:
- have a period of authorised unpaid leave
- have purchased additional leave by salary sacrifice
- have a period of unpaid additional child-related leave
- take industrial action (strike)
- are called on Reserve Forces leave
- are called on jury service
Remember, during these periods you will not be paying your LGPS contributions, therefore would lose the accumulated pension for this period.
Authorised leave of absence (unpaid) (includes child-related leave)
While on paid statutory child-related leave, you are required to pay pension contributions on the pay you receive, but you will receive the same pension as though you had paid full contributions. Your employer is required to pay full pension contributions as though you were receiving your full normal pay.
If you take unpaid leave, or additional child-related unpaid leave, or buy extra leave by salary sacrifice, you will not pay any pension contributions and therefore will lose any pension for this period.
Paying into the 50/50 section
If you’re in the 50/50 section of the scheme and you go on unpaid leave or sick leave, you will automatically be moved into the main section of the scheme from the beginning of the next pay period (if you are still not receiving any pay).
If you are in the 50/50 section and go onto no pay during ordinary maternity and adoption leave (usually the first 26 weeks) or paternity leave you will automatically be moved to the main section of the scheme from the beginning of the next pay period.
In both instances, you will be able to elect back into the 50/50 section on your return to work.
Additional pension contributions (APCs) and absence
It is possible to buy ‘lost’ pension or boost your pension at retirement by paying for Additional Pension Contributions (APCs).
If you opt to purchase ‘lost’ pension within 30 days of returning to work, your employer will pay 2/3 of the total cost; this is known as a Shared Cost APC (SCAPC). If you elect to pay for an APC for any ‘lost’ pension after the 30 days, you will be required to pay the full cost of the APC, unless your employer chooses to make a contribution at their discretion.
Please note, the shared cost option (SCAPC) does not apply to a period of strike.
The maximum period that can be purchased in this way is 36 months.
It is not possible to buy an APC for ‘lost’ pension if you leave and do not return to active employment.
You can choose to stop paying an APC at any time and will be credited with the amount of additional pension pro-rata, to the length of time it was paid for.
Please note, an APC only buys pension for you, therefore, does not count towards any dependent pensions.
Cost of additional pension contributions (APCs)
If you would like to find out how much it would cost for you to buy an APC, use the online calculation tool. If you’re having trouble with the online calculator, please contact your employer for more details.
Before you use the calculator, you will need to know:
- the total pensionable pay lost during your period of absence
- the share of the cost your employer has agreed to meet
- a confirmation of the section you were in during the absence (Main or 50/50)
It may also help if your employer can confirm the reason for and the specific dates of the period of absence.
The cost calculation is based on:
- your age
- loss of pensionable pay during period of absence
- number of years taken for the APCs to be paid
- a pension accrual rate of 1/49th (1/98th in the 50:50 scheme)
You will also need to print off two election forms: one for your employer and another one for Peninsula Pensions.
Paying for your APCs/SCAPCs
APCs and SCAPCs can be paid as regular contributions over a time period that suits you.
This flexibility enables you to pay over a minimum period of one year, or multiple instalments over the course of several years. However, you can only schedule these regular contributions over multiples of whole years.
Alternatively, you can pay in a lump sum through a deduction from your own pay. All of these contributions will receive tax relief at source.
A lump sum can also be paid direct to Peninsula Pensions, but you will need to claim any due tax relief from HMRC on a self-assessment tax form. Please contact us if you are interested in this option.
Payments to an APC and SCAPC can only be made as a monthly contribution up until your normal pension age (NPA). If you are already over your NPA, payment would have to be made in a lump sum.