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Pension contributions during maternity leave

(1 Post)
MaverickSnoopy Wed 22-Jun-16 09:25:13

I am part of my company pension scheme which is operated on a salary sacrifice basis (with a contribution of 8% of my salary). As I am about to go on maternity leave I enquired with the company pensions administrator as to what my options are during mat leave - with my last employer they sent me a list of options in advance, i.e. opt out, stay in etc.

The administrator says I can opt out or stay in of the scheme. If I stay in then during the first 6 months (of which I receive full pay) normal deductions of 8% will be taken. She then gives conflicting information about months 7 - 9. She says that for months 8 - 12 my contributions will be collected directly from my employer as I will not be receiving any SMP or salary. Fine.

With regards to months 7 - 9 I am not clear. The administrator says that they will continue to take 8% during months 7 - 9 but it will be adjusted to reflect 8% of SMP (rather than my usual salary). I queried this as the pension scheme booklet says "SMP must not be reduced for employees who are taking part in a salary sacrifice arrangement prior to embarking on maternity leave. If an employee is entitled to contractual maternity pay, which exceeds SMP, then pension contributions may be deducted from maternity pay providing the remaining payment to the employee does not fall below the current level of SMP." She then double checked and said "we do not reduce your SMP payment, as when you are on the 13 week SMP period of your Maternity leave salary sacrifice does not apply so you are not penalised in any way as the employer will make up your pension contributions". I went back and said "just to confirm, that during months 7 - 9 my SMP will not be reduced" and she has responded by saying that 8% will be deducted from my SMP. Am I misreading her emails, because I feel as if I am going round in circles?

It's my understanding that pension contributions can be taken from SMP government guidance on this is here. However, I make my contributions via salary sacrifice and according to this government information "If an employee has entered into a salary sacrifice with you their AWE is calculated using the amount of earnings actually paid to them during the relevant period. SMP cannot be sacrificed, it must be paid in full."

Obviously if I need to continue to pay 8% then I will try to do this as I don't particularly want to opt out of the scheme during my maternity leave. However, an 8% deduction from my SMP is quite a lot for us and we're likely to have to change our plans because of this, and so I want to be certain that this is something that should be happening.

Looking through her emails and the information, it sounds to me like they we be taking me out of salary sacrifice in order that they can still deduct the 8% - am I reading this wrong and is this something that they can do?

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