You must report a member's absence from work without pay to Pension Services.
If the member is on zero or reduced pay
Assumed pensionable pay (APP)
You must report assumed pensionable pay to Pension Services if you have employees on reduced or zero pay. 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. Their pension keeps growing as if they were still receiving their normal pay.
Lost Pensionable Pay (LPP)
You must report lost pensionable pay to Pension Services if you have employees on unpaid authorised absence of less than 15 days. LPP is the member’s normal contractual pay.
What employers 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 notional amount that protects pension build-up.
LPP
LPP is the amount of normal contractual pay that the member has lost while on unpaid leave.
2. Report on i-Connect
APP or LPP 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 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 or LPP calculation
- the value of their lost pay
- options to restore pension (if applicable)
Help with APP
Types of absence and what you must do
Sick leave
- APP applies automatically if pay is reduced or nil
- Pension builds up as if the member were working normally
- Member contributions:
- Are paid on actual pay received
- Stop if the member is on no pay
- Employer contributions must be paid as normal
There is no action required by member to protect their pension.
50/50 section during sick leave
Members in the 50/50 section must move to the main section if they go onto zero pay during sick leave. The move happens at the start of the pay period after zero pay begins.
If the member wants to return to the 50/50 scheme on their return to work, they will need to complete a new 50/50 election form.
Child-related leave
Relevant child-related leave includes:
- maternity leave
- adoption leave
- paternity leave
- shared parental leave
Check a list of all types of relevant child-related leave.
Paid relevant child-related leave
During paid relevant child-related leave, APP applies.
Unpaid relevant child-related leave
If unpaid, additional, relevant child-related leave starts on or after 1 April 2026, APP applies and no buy back is required from the member.
Employers must pay employer contributions based on APP.
This is a key change under the Access and Fairness reforms in 2026.
IMPORTANT: If any part of the leave is unpaid and that unpaid period starts on or after 1 April 2026, apply Assumed Pensionable Pay (APP) and tell the member that the pension buy back is no longer required.
If unpaid relevant child-related leave started before 1 April 2026, the period should be recorded as unpaid and APP does not apply. If the member wants to buy back their lost pension they will need to apply for an APC or SCAPC.
50/50 section during relevant child-related leave
Members in the 50/50 section must move to the main section if they go onto zero pay during relevant child-related leave. The move happens at the start of the pay period after zero pay begins.
If the member wants to return to the 50/50 scheme on their return to work, they will need to complete a new 50/50 election form.
Short authorised unpaid leave (14 days or less)
From 1 April 2026 during short, authorised, unpaid absences, Lost Pensionable Pay (LPP) applies. LPP is the member’s normal contractual pay and should be reported in the same way as APP.
There is no further action required by the member to protect their pension.
Employers and employees must pay contributions based on LPP.
This is a key change under the Access and Fairness reforms of 2026.
Longer authorised unpaid leave (more than 14 days)
For authorised, unpaid absences over 14 days, pension is not automatically built up during the unpaid period.
When unpaid absence started on or after 1 April 2026, members can choose to restore pension on their return to work using a Qualifying Additional Pension Arrangement (QAPA).
- You must:
- report the unpaid absence on i-Connect
- inform the member of lost pensionable pay
- use the QAPA calculator to work out the cost
- offer the member the option to enter into a QAPA
This replaces the previous APC / SCAPC process for unpaid leave.
The QAPA calculator and guidance notes can be found here. Employers may need to adapt the calculator where:
- the member pays by lump sum directly to the pension fund
- the unpaid break lasts more than three years and employer contributions do not continue beyond the first three years
- the member moves between the main and 50/50 sections during the unpaid period
- regular contributions are to be spread over more than nine years
Employers and employees must pay contributions if the member uses a QAPA.
If the break is longer than three years, employers only have to contribute for the first three years.
When unpaid absence started before 1 April 2026 the member must use an APC or SCAPC to buy back lost pension.
Industrial action and unauthorised absence
- Not pensionable
- No APP applies
- No pension build-up
Members may be able to buy back pension using an APC, but the full cost (including employer element) may apply.
Reserve forces leave
- APP applies
- Pension builds up as if the member were working normally
- Special contribution arrangements apply (often involving the MoD)
