Should my wife pay her pension whilst on maternity

cheggers

My wife is in a final salary pension scheme she is going on 6 months maternity soon. Her work want to know if she wishes to continue her pension contribution whilst she is off. Should she?

I have told her continue with the contributions, but she says she doubts she can afford to do it as she will be on half pay whilst off.

Debt_Free_Chick

Oh this is interesting!

They MUST continue to provide her with her pension, based on the rate of pay she would recieve if she were at work. In other words, her maternity leave has no effect on her pension at all. She gets the same as she would, if she'd simply worked.

Her contributions, however, are the normal percentage, but applied to whatever pay she actually recieves. So if her contribution rate is 5%, then she simply pays 5% of her maternity pay.

She pays less, but gets the same pension as if she were working.

This applies to all periods of Ordinary Maternity Leave and any Additional Maternity Leave for which she is paid.

She needs to tell them that this all legally required under the Maternity and Parental Leave etc Regulations 1999 which came into force on 15th December 1999.

Regards

Savvy_Sue

I was about to post a question about this but fortunately did a couple of searches first and found DebtFreeChick's most helpful post above!

Just to check I've got this right: a colleague has just gone on maternity leave and only just got round to setting up her pension plan, despite having been with us for a year or so. I've been asked what the Employer's contributions are going to be - normally 2% - and my first assumption was that it would be 2% of what's showing on her payslip each month, which this time is half 'normal' pay and half SMP.

But actually we should be paying 2% of her 'normal' salary into her pension plan each month, regardless of how much money she's getting? Plus of course a humungous backdating ...

Debt_Free_Chick

Savvy_Sue wrote:

I was about to post a question about this but fortunately did a couple of searches first and found DebtFreeChick's most helpful post above!

Just to check I've got this right: a colleague has just gone on maternity leave and only just got round to setting up her pension plan, despite having been with us for a year or so. I've been asked what the Employer's contributions are going to be - normally 2% - and my first assumption was that it would be 2% of what's showing on her payslip each month, which this time is half 'normal' pay and half SMP.

But actually we should be paying 2% of her 'normal' salary into her pension plan each month, regardless of how much money she's getting? Plus of course a humungous backdating ...

I assume you are backdating her pension plan by a year, back to when she first started with you? Unless your rules state otherwise, then this is optional - there is no legal requirement to backdate especially if she has only just made up her mind and/or filled out the forms.

However, having allowed her into the pension plan - whether or not you backdate - then yes, whilst on maternity leave the employer must contribute 2% of the salary she would be paid, if she were at work. Not 2% of what's on her payslip. From your description, ignore the SMP, double the "normal rate" on her payslip and pay 2% of that.

Remember, that she pays x% of what's on her payslip, only.

HTH

Savvy_Sue

Debt_Free_Chick wrote:

I assume you are backdating her pension plan by a year, back to when she first started with you? Unless your rules state otherwise, then this is optional - there is no legal requirement to backdate especially if she has only just made up her mind and/or filled out the forms.

However, having allowed her into the pension plan - whether or not you backdate - then yes, whilst on maternity leave the employer must contribute 2% of the salary she would be paid, if she were at work. Not 2% of what's on her payslip. From your description, ignore the SMP, double the "normal rate" on her payslip and pay 2% of that.

Remember, that she pays x% of what's on her payslip, only.

HTH

Thanks. She's decided not to make any contributions herself - I know, I know, you don't have to tell me that 2% is not going to give her anything like enough pension even if she was a lot younger than she is! Although our contract doesn't say we will backdate, traditionally we have always done so, including backdating any extra due after a payrise. Therefore I will do the same for her. It certainly makes life simpler if I just tell the provider we are paying 2% of x rather than having to alter her amount each month.

Mind you, perhaps if I told the other 'recent starters' (ie in the last 12 months) that we were only going to backdate for a set period that would concentrate their minds! I just can't believe what's stopping them - the forms are not that bad! I know to begin with they didn't realise that this was something the charity was doing FOR THEM, at NO COST to them, even if not at particularly generous rates, and I was off sick so didn't tell them. Once I was back I started nagging them and they were all a little more motivated once I said it didn't have to cost them anything! Although, of course, I'm recommending to all of them that they seriously consider contributing, even if retirement is a lot further off for them than it is for me!

Very grateful for your help: it wasn't that we were trying to get out of paying what was due: just ignorant about what was required - the first staff baby ever although there's another on the way now! Our payroll is outsourced and they didn't mention this to me and when I checked today they pleaded ignorance. Even when I spoke to someone at the pension provider they didn't know!

magentadreamer

When I was on Mat leave, my pension was taken out automatically during the months I was being paid. When I returned back to work after having 7 months unpaid leave as well I worked out a payment scheme to pay back the 7 months unpaid leave therefore keeping my pension up to date. Is there a way your wife could perhaps defer payments till she was back at work? I think I paid the 7 months off in 4 payments or something.

Dumyat

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