Maternity, paternity and adoption leave - Section 03A

What is maternity, paternity, shared parental leave and adoption leave?

Maternity, paternity and shared parental leave allow a parent to take paid time off work when their child is born

Is this a pension scheme benefit?

No. This is related mainly to employment law, and most employees have a right to some form of maternity, paternity or shared parental leave. Your employer will be able to give you more information on your entitlement.

What if I adopt a child?

In most cases there is adoption leave. A paid break from employment when a newly adopted child moves into your home. You must check with your employer for details of your entitlement to this type of leave.

Am I still an alpha member when I am on maternity, paternity, shared parental or adoption leave?

Yes. Unless you choose to leave alpha, opt out, or switch (see Section 01D - Your other options) you will remain an alpha member.

Would I still have to pay contributions?

If you take maternity, paternity, shared parental or adoption leave, you would continue to pay the same percentage rate in contributions based on the amount of pay you are actually receiving.

If you receive statutory pay, your contribution rate will be a percentage of that.

If your leave is unpaid and you do not receive pay, you will not have to make contributions.

How much alpha pension do I build up?

While on paid maternity, paternity, shared parental or adoption leave your alpha pension will build up as if your pensionable earnings were at their usual level. Your usual level of pay is called ‘assumed pay’.

For example:

Lesley’s usual pay is £1,750 per month (or £21,000 a year) and she pays a monthly contribution rate of 4.6%, around £80.50 per month.

During a period of adoption leave her monthly pay reduces to Statutory Maternity Pay (SMP) of approximately £560 per month.

While Lesley is getting SMP her contributions are based on the actual pay she receives of £560 per month. So Lesley’s alpha contributions are 4.6% of £560, which is around £26 per month. Her employer continues to pay contributions too.

Lesley’s alpha pension will be worked out as if she had been paid her usual salary of £1,750 for each month that she was getting SMP.

If Lesley had a period of unpaid leave, and both her and her employer’s contributions stop, then this period does not count towards her pension.