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Pension Rights During Pregnancy, Maternity, Paternity And Adoption Leave?

The legislation and regulations relating to maternity leave and pay entitlements are described within employment law in the UK. Policies are in place to help employees understand their statutory rights and responsibilities during pregnancy and recent childbirth.

The law includes details of arrangements for annual leave accrual, pension rights, maternity pay, leave entitlements, antenatal appointments, and pregnancy-related illness.

The Employment Act, along with the Pensions Act 2004, Maternity and Parental Leave etc. Regulations 1999, Social Security Act 1989 and Children and Families Act 2014, protects would-be parents against unfair dismissal and detriment.

Let us take a closer look at the pension rights of employees during pregnancy, maternity, paternity, and adoption leave.

Eligibility and Entitlements During Maternity Leave

When determining the pension rights of an employee during a period of maternity leave, it is important to consider whether she is receiving any pay.

While the statutory maternity leave period is 52 weeks (26 weeks of Ordinary Maternity Leave and an additional 26 weeks of Additional Maternity Leave), the Statutory Maternity Pay period is 39 weeks.

If an employee is receiving maternity pay (either statutory, contractual, or both), the employer has a responsibility to maintain their pension benefits as if the employee was still at work. Subsequently, all pension benefits, including contributions, should continue during Ordinary Maternity Leave.

However, pension benefits during the Additional Maternity Leave need only continue if the employee is being paid (unless continued provision is specifically mentioned under the employment contract)

Furthermore, the employer may also require the employee to make their share of contributions out of their maternity pay. However, the employee’s contribution will be calculated on the basis of the actual pay that the employee receives rather than their pre-maternity leave salary.

Employees are also entitled to statutory minimum maternity leave of 26 weeks along with an additional 16 weeks unpaid leave under the Maternity Protection Acts.

They will also continue to receive benefits from any Occupational Pension Scheme (OPS) contributions during the period of paid maternity leave.

If the terms and conditions of OPS require employee contributions to continue during maternity leave, their contributions should be calculated on the amount of statutory and/or enhanced maternity pay they are receiving. Therefore, employee contributions will stop during the unpaid maternity leave period, although they can still make voluntary contributions.

Eligibility And Entitlements During Adoption Leave

Under UK employment law, all employees may take up to 52 weeks of Statutory Adoption Leave if they have been under continuous employment for an employer for at least 26 weeks before the “Matching Week” or the week in which they receive information about being matched with a child.

If a couple are jointly adopting a child, only one of them may take Adoption Leave while the other partner may still be eligible for Paternity Pay and Leave.

If your employer contributes to an Occupational Pension Scheme (OPS), they should continue to make their usual contributions for:

  • the entire period the employee is on Ordinary Adoption Leave (the first 26 weeks);
  • any period of time the employee is receiving any Statutory Adoption Pay;
  • the period of time the employee is receiving any contractual adoption pay;

If an employee normally makes contributions to their pension, they may choose to continue doing so, according to the amount of adoption pay they are receiving.

Eligibility And Entitlements During Paternity Leave

When an employee is on Paternity Leave, they would continue to receive pension benefits and contributions to be paid as per the Section 265 of the Pensions Act 2004. Therefore, during periods of paid paternity leave, the employee must continue to receive the ongoing pension benefits, including employer contributions. Furthermore, the employers should continue to calculate their contributions according to the employee’s normal salary (i.e. as though the employee was not on leave).