If you’re getting ready or, currently on maternity, paternity, adoption, parental or shared parental leave (family leave) the amount of pension you build-up is not affected if you’re in pensionable service (not opted out of the Scheme).

You’ll pay less by way of contributions as, even though your contribution percentage rate is based on your salary before you went on leave, it’s only applied to your actual pensionable earnings in the period you’re on family leave. You remain in pensionable service when on family leave as long as you’re receiving at least half pay or any statutory pay.

Another great benefit of staying with the Scheme while on family leave or re-joining before family leave is the valuable in-service death benefits: the death grant of three times the annual full-time equivalent rate of pensionable earnings; and the enhancement to the long-term pensions we’ll pay to your qualifying beneficiaries (both adult and child pensions are paid by the Scheme).

Example case

Jennie has been on maternity leave for 18 weeks and will now only receive statutory maternity pay for a further 21 weeks if she chooses to take additional maternity leave. As Jennie’s usual pensionable earnings are £30,000 per year her contribution rate is 8.6%, and this is the rate that will apply to her statutory maternity pay of £145.18 per week for the further 21 weeks. Usually Jennie would have paid pension contributions of £1,041 over a 21 week period and have added £213 to her annual pension, but as she’s receiving statutory maternity pay she’ll pay pension contributions of £262 over the 21 weeks but still accrue £213 of annual pension.

This benefit also applies to any death grant as Jennie will continue to be treated as being ‘in service’. This means the death grant will be based on her full-time equivalent salary prior to going on family leave, even if she reaches the point where half pay/statutory pay is exhausted.

All this applies, provided you aren’t opted out of the Scheme. These are valuable benefits, yet some members going on family leave are choosing to opt out and losing pension accrual and life cover.

If you’re going on maternity leave or other family leave and you’re thinking of either opting out or remaining opted out, think twice before you do. Please seek independent financial advice before making any decisions.