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Workplace pensions and parental leave

6th Oct 2016

Employees taking parental leave – that’s maternity leave, paternity leave, adoption leave or shared parental leave, continue to build up pension benefits while on leave.

Any sort of parental leave will form part of qualifying earnings for workplace pension contributions.

An employee may ask for pension contributions to be reviewed while on leave, especially if there’s a drop in income.

If an employee is paying more than the minimum contribution into their pension scheme they can ask for their contributions to be reduced to the minimum level. They can go back up again when you your employee returns to work and pay increases.

Employees on parental leave can, of course, choose to leave the pension scheme and then all contributions will stop; your own and your employees. An eligible worker might ask to re-join the scheme once he or she comes back to work but this will depend on your employer rules and the rules of your scheme. You can ask for employers to wait for up to three years to be re-enrolled back into the scheme.

Non-eligible jobholders and entitled workers can ask to re-join at any time but you only have to action a request to re-join once every 12 months. Entitled workers may not be allowed to re-join, but again, this is up to you and the pension scheme rules.

If you have an employer who doesn’t qualify for parental pay (because they haven’t been employed for 26 weeks out of the 66 weeks before the expected week of childbirth) you still have to make pension contributions in the first 26 weeks of your Ordinary Maternity Leave. You’re employee will have to contribute as well.

If an employee is on maternity leave when you stage – the date a pension has to be in place – he or she will need to be assessed along with other workers and, if qualifies, will need to be enrolled into the scheme and you’ll need to make contributions along with your employee.

If earnings are too low for your employee to be automatically enrolled he or she can ask to join the scheme by opting in. The communications you send out will explain how to do that.

Gov.uk Maternity leave and pay

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