Absent from work
During your membership of the Local Government Pension Scheme (LGPS) there may be occasions when you are away from work and in some cases do not pay pension contributions. This may be because of:
- Sickness absence
- Child-related leave
- Agreed absence
- Trade dispute
- Jury service
- Reserved Forces leave
If you do not pay contributions for a period of absence you will not automatically build up pension benefits for this period (this excludes sickness absence - see below). There is, however, always an opportunity for you to pay contributions to cover the period of 'lost' pension by entering into a Shared Cost Additional Pensions Contract (SCAPC). We will look at these options in more detail and explain how SCAPCs work.
Note: Your employer will not pay any part of your APCs if the reason for your absence is a trade dispute (strike). Instead you will pay the full cost of the APCs.
Sickness absence
If you are absent from work due to sickness the amount of pension you build up won't be affected. When you are in receipt of full sick pay your pension builds up as normal using the pensionable pay you receive. If you have a period of reduced contractual pay or no pay due to sickness or injury then your pension is worked out using an average of your usual pensionable pay (before the reduction in pay took place). This cover means that when the pay you receive is less than your normal pay (because of sickness or injury), the pension you build up won't be affected. You will only pay your contributions on any pay that you receive.
Child-related leave
If you are a new parent and have a period of relevant child related leave the amount of pension you build up won't be affected.
Relevant child related leave covers all periods of Ordinary Maternity Leave, Ordinary Adoption Leave and Ordinary Paternity Leave and any paid Additional Maternity Leave, Additional Adoption Leave and Additional Paternity Leave.
This means that if you have a period of reduced contractual pay or no pay during relevant child related leave your pension is still worked out using an average of your usual pensionable pay (before the reduction in pay took place). This is referred to as your Assumed Pensionable Pay (APP).
You will only pay your contributions on any pay that you receive. If you decide to take a period of unpaid additional Maternity, Adoption (usually from week 39 to week 52) or Paternity Leave you will not build up pension benefits. You can avoid this by paying buying back the lost pension.
If you return to work following your unpaid leave your employer should write to you giving you the option of buying back the ‘lost pension’. If you elect to buy back the ‘lost pension’ within 30 days of returning to work you can pay Shared Cost Additional Pension Contributions (SCAPCs). By paying SCAPCs you only have to pay 1/3rd of the cost and your employer pays 2/3rds.
For more information on paying SCAPCs to buy back your 'lost' pension please contact your employer's payroll department directly.
Agreed absence
If you are away from your job for a period of time with the agreement of your employer (for any reason other than sickness or injury) for a continuous period you can elect to buy back any ‘lost’ pension’ upon your return to work. If you return to work and choose not to pay contributions for your period of absence, the value of your LGPS pension benefits will reflect a break.
Your employer is responsible for contacting you on your return to work to provide you with the option to buy back any lost pension.
Trade dispute
If you are away from work without the permission of your employer due to being involved in a strike, your LGPS pension entitlement will reflect a break for any days that you are absent. If you wish to pay contributions for any strike period you will need to enter into a 'Full Cost' APC contract i.e. your employer will not pay any part of the APCs.
Jury service
Absence due to a period of jury service is treated in exactly the same way as periods of agreed absence. Therefore, please refer to the section headed 'Agreed absence'.
Reserve Forces leave
If you enter into a period of reserve forces leave you will continue to pay a contribution to the Fund in order to continue to build up a pension as if you had been at work throughout.
In order to do this your contribution will be based on your Assumed Pensionable Pay. The Ministry of Defence would then be required to deduct these contributions from you and pay them over to the Berkshire Pension Fund in order to maintain your continued pension entitlement.
Buying periods of 'lost' pension
You can elect to cover the period of pension 'lost' by taking out a Shared Cost Additional Pension Contribution (SCAPC) contract.
Where a SCAPC contract is taken out to cover the pension 'lost' during a period of unpaid additional Maternity, Adoption or Paternity leave or periods of unpaid authorised leave of absence. The cost is shared 1/3rd to the employee and 2/3rds to the employer, provided that you make an election to buy the 'lost' pension within 30 days of returning to work.
The cost of buying back any period of 'lost' pension is determined by a series of age-related factors provided by our Government Actuary's Department.
If you would like to find out the cost of buying back 'lost' pension in respect of an unpaid period of absence please see our SCAPC factsheet.
Alternatively you can calculate the cost using an online modeller.