Your employees may need to take time away from work during their employment. Rules apply to protect their pension if they are on sick leave, child-related leave, unpaid authorised leave or reserve forces leave. From 1 April 2026 under the Access and Fairness Regulations some of the rules around absences have changed.
Sick leave
Reduced pay sick leave
Employee contributions: Based on actual pay received.
Employer contributions: Based on assumed pensionable pay (APP).
Final salary benefits (up to 31.3.2014): Pensionable pay should not be affected as notional pay should be provided.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay should not be affected as APP should be provided .
Unpaid sick leave
Employee contributions: No contributions due.
Employer contributions: Based on assumed pensionable pay (APP).
Final salary benefits (up to 31.3.2014): Pensionable pay should not be affected as notional pay should be provided.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay should not be affected as assumed pensionable pay should be provided
Stringer days (annual leave taken during a period of sick leave)
Employee contributions: Based on actual pay received.
Employer contributions: Based on assumed pensionable pay (unless actual pensionable pay is higher).
Final salary benefits (up to 31.3.2014): Pensionable pay should not be affected as notional pay should be provided.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay should not be affected as assumed pensionable pay (APP) is added back in. However, APP does not apply on a ‘Stringer day’ if the pensionable pay the member receives is greater than the APP.
Paid child related leave
Employee contributions: Based on actual pay received.
Employer contributions: Based on assumed pensionable pay (APP).
Final salary benefits (up to 31.3.2014): Pensionable pay should not be affected as notional pay should be provided.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay should not be affected as APP should be provided.
Unpaid child related leave started on or before 31 March 2026
Employee contributions: No contributions due.
Employer contributions: No contributions due.
Final salary benefits (up to 31.3.2014): Depends if the member takes out an Additional Pension Contributions (APC) contract as to whether pensionable pay is affected.
If the member takes out an APC contract: Pensionable pay should not be affected as notional pay should be provided.
If the member does not take out an APC contract: If an APC contract was not taken out to cover the unpaid leave period, the pensionable pay for the period of unpaid leave should be excluded from both the ‘actual final pensionable pay’ and the ‘whole time equivalent final pensionable pay’. However, the figures should then be uprated to 365 days by taking the number of remaining days for the final year and multiplying by 365. E.g., for 2 days unpaid leave, divide by 363 and multiply by 365.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay is affected – there is no CARE pensionable pay for the nil pay period.
The member must be given the option to take out an APC contract.
Additional Pension Contributions Contract (APC)
- You should provide the employee with their pensionable pay for the period of unpaid leave as soon as they return to work. Signpost the employee to the APC calculator and election form.
- If the employee wants to take out an APC contract they should return the election form to your payroll team.
- If the election is made within 30 days of returning to work (or longer if your discretions policy allows it) the cost of the APC is split between the employee and employer. The employee will pay one third of the cost and the employer will pay the rest.
- You should complete a Record of Absence Form even if the employee does not take out an APC contract.
Unpaid child related leave started on or after 1 April 2026
This applies only where the unpaid element of child‑related leave begins on or after 1 April 2026. Therefore, if a member is already on leave before that date, the rule will apply only if the unpaid portion of that leave starts after 1 April 2026. If the member is in the 50/50 section you must move them to the main section at the beginning of the pay period the day after the unpaid starts.
Employee contributions: No contributions due.
Employer contributions: Based on assumed pensionable pay.
Final salary benefits (up to 31.3.2014): Pensionable pay should not be affected as notional pay should be provided.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay should not be affected as assumed pensionable pay should be provided.
Authorised unpaid leave started on or before 31 March 2026
Employee contributions: No contributions due.
Employer contributions: No contributions due.
Final salary benefits (up to 31.3.2014): Depends if the member takes out an Additional Pension Contributions (APC) contract as to whether pensionable pay is affected.
If the member takes out an APC contract: Pensionable pay should not be affected as notional pay should be provided.
If the member does not take out an APC contract: If an APC contract was not taken out to cover the unpaid leave period, the pensionable pay for the period of unpaid leave should be excluded from both the ‘actual final pensionable pay’ and the ‘whole time equivalent final pensionable pay’. However, the figures should then be uprated to 365 days by taking the number of remaining days for the final year and multiplying by 365. E.g., for 2 days unpaid leave, divide by 363 and multiply by 365.
Career average (CARE) benefits (from 1.4.2014):
Pensionable pay is affected – there is no CARE pensionable pay for the nil pay period.
The member must be given the option to take out an APC contract.
Additional Pension Contributions Contract (APC)
- You should provide the employee with their pensionable pay for the period of unpaid leave as soon as they return to work. Signpost the employee to the APC calculator and election form.
- If the employee wants to take out an APC contract they should return the election form to your payroll team.
- If the election is made within 30 days of returning to work (or longer if your discretions policy allows it) the cost of the APC is split between the employee and employer. The employee will pay one third of the cost and the employer will pay the rest.
- You should complete a Record of Absence Form even if the employee does not take out an APC contract.
Authorised unpaid leave started on or after 1 April 2026
Authorised unpaid leave of less than 15 calendar days
Employee contributions: The contributions are compulsory based on ‘lost pensionable pay’. This is the pay the employee would have received if they had been at work receiving their ‘normal’ pay. ‘Normal’ pay is based on the employee’s contractual pay. Unlike Assumed Pensionable Pay (APP), it is not increased because of non-contractual payments in the past, such as non-contractual overtime.
Employer contributions: Based on lost pensionable pay at the rate that would have applied at the time of the unpaid leave.
Final salary benefits (up to 31.3.2014): Pensionable pay is not affected as normal pay is provided.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay is not affected as normal pay is provided.
Where an employee purchases additional leave that is treated as unpaid, the same contribution and pensionable pay rules set out above will apply.
Authorised unpaid leave of more than 14 calendar days
Employee contributions: No compulsory contributions due.
Employer contributions: No compulsory contributions due.
Final salary benefits (up to 31.3.2014): Depends if the employee takes out a Qualifying Additional Pension Arrangement (QAPA) contract as to whether pensionable pay is affected.
If the employee takes out a QAPA contract: Pensionable pay is not affected as normal pay will be provided.
If the employee does not take out a QAPA contract: If a QAPA contract was not taken out to cover the unpaid leave period, the pensionable pay for the period of unpaid leave should be excluded from both the ‘actual final pensionable pay’ and the ‘whole time equivalent final pensionable pay’. However, the figures should then be uprated to 365 days by taking the number of remaining days for the final year and multiplying by 365. E.g., for 2 days unpaid leave, divide by 363 and multiply by 365.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay is affected – there is no CARE pensionable pay for the unpaid period.
The employee must be given the option to take out a QAPA contract. You should complete a Record of Absence Form even if the employee does not take out a QAPA contract.
Qualifying Additional Pension Arrangement (QAPA)
- You should provide the employee with the dates of the unpaid break, the employee cost, the cost per pay period, if paying by regular contributions, as soon as they return to work.
- The employee must make an election to buy back the lost pension within one year of returning to work (unless you allow longer) and must be in the same employment as during the absence.
- If the employee wants to take out a QAPA contract, to cover all or part of the authorised absence, they should return the election form to your payroll team.
- Employers and employees contribute to the cost of a QAPA. Both Employees and Employers pay the contributions they would have paid if they had not been absent. If they were in the 50/50 scheme immediately before the absence and they have not been moved back to the main section the employees will pay at the reduced rate.
- Employee contributions can be paid as a lump sum or by regular deductions from their pay over the agreed period. The employee under certain circumstances can make the lump sum payment directly to the Fund. The QAPA paid by regular deduction must end before the employee’s normal pension age (NPA). An employee over NPA or within a year of NPA can only pay by lump sum.
- Employer contributions are compulsory if the authorised absence is less than or equal to three years, or for the first three years if the absence is longer. Beyond three years the employer may continue to contribute or the employee can choose to pay the full cost of employee and employer contributions.
- You should complete a Record of Absence Form.
Keep in touch (KIT) and shared parental leave (SPLIT) days
When on child-related leave, the employee may return for KIT or SPLIT days.
Employee contributions: Based on actual pay received.
Employer contributions: Based on assumed pensionable pay (unless actual pay is higher).
Final salary benefits (up to 31.3.2014): Pensionable pay should not be affected as notional pay should be provided.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay should not be affected as assumed pensionable pay (APP) is added back in. However, if pay is higher than the assumed pensionable pay, use actual pay received.
Trade dispute absence
Employee contributions: No contributions due.
Employer contributions: No contributions due.
Final salary benefits (up to 31.3.2014): Pensionable pay for the trade dispute absence should be excluded from both the ‘actual final pensionable pay’ and the ‘whole time equivalent final pensionable pay’. However, the figures should then be uprated to 365 days by taking the number of remaining days for the final year and multiplying by 365. E.g., for 2 unauthorised absence days, divide by 363 and multiply by 365.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay is affected – there is no CARE pensionable pay for the nil pay period.
The member must be given the option to take out an Additional Pension Contributions (APC) contract. You must complete a Record of Absence Form.
You do not contribute to the APC; the cost is fully met by the employee.
Unauthorised absence
Employee contributions: No contributions due.
Employer contributions: No contributions due.
Final salary benefits (up to 31.3.2014): Pensionable pay for unauthorised absence should be excluded from both the ‘actual final pensionable pay’ and the ‘whole time equivalent final pensionable pay’. However, the figures should then be uprated to 365 days by taking the number of remaining days for the final year and multiplying by 365. E.g., for 2 days of unauthorised absence, divide by 363 and multiply by 365.
Career average (CARE) benefits (from 1.4.2014): Pensionable pay is affected – there is no CARE pensionable pay for the nil pay period.
You should complete a Record of Absence Form to confirm the dates of the unauthorised absence.
Reserve forces service leave
An employee on reserve forces service leave can elect to stay in the LGPS and continue to build up a pension as if they were still at work. The employer would calculate assumed pensionable pay (APP) for this period but would not pay any employer contribution to the Fund. The employer would notify the reservist and, via the reservist, the Ministry of Defence (MoD) of both the APP figure and the employee and employer contribution rate due on that amount.
The MoD would pay the employee and employer pension contributions to the Fund. If the employer continues to pay the reservist some pay whilst they are on reserve forces service leave, that pay is non-pensionable. Neither employee nor employer contributions should be deducted.