Away from work with reduced or no pay

You must report a member's absence from work without pay to Pension Services.

If the member is on zero or reduced pay

You must report Assumed Pensionable Pay (APP) to Pension Services if you have employees on:

• sick leave
• maternity leave
• adoption leave
• parental leave

APP is the notional pay figure you calculate when an employee's actual pay drops due to being off work.

This calculation ensures there are no long-term impacts to a member's pension while they are receiving reduced pay. Their pension keeps growing as if they were still receiving their normal pay.

What you, the employer, need to do

1. Calculate APP

Monthly-paid staff: Average the pensionable pay from the 3 months before the reduction.

Weekly-paid staff: Average the pensionable pay from the 12 weeks before the reduction.

These calculations produce a fair notional amount that protects pension build-up.

2. Report APP on i-Connect

APP replaces the pensionable pay figure you would normally submit.

• update the monthly figure
• update the year-to-date totals
• report any service breaks either via the i‑Connect spreadsheet or contact us

Getting this right ensures smooth processing and avoids follow‑up questions later. You should:

• provide clear information about the employee's circumstances
• double-check your payroll system is calculating and reporting APP correctly
• sense check your totals - if something looks odd, it probably is

What you must tell the member

Following an authorised period of unpaid leave, it is your responsibility to tell the member:

• that you have used the APP calculation
• the value of their 'lost pay'

Help with APP

• detailed guidance on calculating APP – LGA payroll guide
• bite‑size training on calculating APP

Authorised unpaid leave and buying lost pension

If the member takes any period of authorised unpaid leave, it will not count for pension purposes, including:

• unpaid additional maternity or adoption leave
• unpaid shared parental leave

However, the member can choose to pay additional pension contributions (APC) upon returning to work to restore the pension they have lost.

If the member elects to pay APCs to buy lost pension within 30 days of returning to work, you will split the cost with the member.

Some employers will extend the time limit. As a fund employer, you must have a policy about:

• whether to extend the time, beyond 30 days from return to work, for members to decide about restoring the pension
• the circumstances under which you will share costs with members beyond the statutory time limit

Download the absence template letters.

Different procedures apply during unpaid sick leave or leave for reserve forces. Contact us for more information.

About repayments

Member repayment must be either a single lump sum or in instalments. The period for instalments must be in whole years. For instalments lasting more than one year, the member must supply a medical certificate from their GP.

• an application for instalments of less than £5 per month must be a single lump sum
• any variation in terms must be in your policy and agreed by Pension Services
• you may not divide a lump sum cost to recover in smaller portions

If the employee misses the 30‑day time limit

• you may consider extending the 30‑day limit
• the member can still buy the lost pension, but without your contribution
• the member must obtain a new APC quote
• you may consider supporting costs through your SCAPC policy

Shared cost additional pension contribution (SCAPC) and elections

You must liaise with Pension Services and the Fund Investment team for SCAPC processes. Eligible elections made within regulatory deadlines must be shared‑cost.