Buying back lost periods of pension
If a member has had a leave of absence due to authorised unpaid leave, unpaid additional child related leave they can elect to buy back the 'lost' period of pension through the purchase of a Shared Cost Additional Pension Contributions (SCAPC) contract.
As the member will not have earned any pensionable pay the pension they would have built up during the period has been lost. You can do this regardless of whether you are in the main or 50/50 sections of the pension scheme.
Buying back the whole of the lost pension will ensure the period of leave of absence is included when calculating certain protections if the member joined the LGPS before 1 April 2014.
Members can choose to buy the lost pension by spreading payment over a number of complete years (unless they are within 1 year of their Normal Pension Age under the scheme) or by means of a one off lump sum.
The employer will meet two-thirds of the cost of buying back lost pension other than for an absence due to a trade dispute, provided the member elects to do so within 30 days of returning to work.
Process for buying back 'lost' pension
To buy lost pension the member should first obtain from their employer a written statement of:
a) The total assumed pensionable pay lost during the period of absence,
b) The share of the cost the employer will meet i.e. 2/3rds,
c) Confirmation of the section of the scheme the member was in during the period of absence (i.e MAIN or 50/50),
d) Reason for absence and the start and end dates of the period of absence.
Please read the 'Employer Actions' information sheet for further information regarding this process.
Employers should provide the above information to members automatically at the end of the period of absence.
Using the information provided in the Specimen letter 1 the employee should obtain a quote of the cost of purchasing the lost pension from the National LGPS website.
The quote will use the lost pay and section information to determine the amount of pension which is to be purchased.
After getting the quote the member should, using the form provided on the National website, submit an application to both their employer and the Royal County of Berkshire Pension Fund.
The member will be presented with the following screen, from here please click Buy Lost Pension.