Workplace pension on maternity - AIBU?

[MMoon23]

I am currently on month 4 of my maternity leave and happened to check my pay slips the other day as I was randomly thinking about my pension.

I usually pay around £90 into my pension each month which my employer then matches.

I was quite shocked to see basically nothing is going in to my pension while I am off?

• see attached screenshots for figures (my maternity leave was full pay for a month, 90% for a few weeks then half pay for another 12 weeks I think, hence the difference in what is on my payslips month to month)

I thought my own contributions would reduce, but not by this much down to basically nothing? also, I thought my employer would still pay in a bit more to my pension? Or have I got this totally wrong?
They appear to just be matching what I am contributing.

I emailed payroll to ask to find out and they said

‘The reason for your pension contributions being lower than normal is that the Aegon Pension is a salary sacrifice and statutory payments such as SMP are not allowed to be sacrificed. Your pension contribution is therefor 4% of the College maternity uplift amount paid each month’

I’ve emailed back to say that I was referring to their contributions - but am I just being silly??? Is this sadly just standard practice for women on maternity leave? It’s just frustrating as I already don’t contribute a lot as I have quite a low income.

I think your employer has to pay in 3% minimum??

So if your contract is for them to match your contributions at 4% this seems right

Might be worth checking their policy. My employer policy is that my contributions will reduce to a percentage of what I am currently getting paid but my employer pays based on what my usual salary is (so they pay in much more than me on Mat leave).
Worth asking the policy

HR bod here

If you are paying pension contributions via salary sacrifice/exchange (depending on terminology used by your company), then your employer needs to pay your total contributions at pre-mat leave levels, covering both employee and employer sides for your entire absence.

There should not be any deductions from your own SMP to cover this.

If they aren't doing it properly, contact Aegon or ACAS for advice.

Thank you so much for sharing this with me! @PensionQ22
it’s good to know I can query with other places if I don’t get any answer at my company…hopefully it will be sorted soon and I won’t have to stress about it

Your slip doesn't show what they themselves put in - and it should be the same as they were putting in before mat leave. Can you ask them to confirm they are doing that?

@BernadetteRostankowskiWolowitz thank you for your comment! Their contribution is under ‘Aegon Pension ERs’ so it’s just the same as mine, they seem to be matching what I put in under Salary Sacrifice. I put in £8, they put in £8 etc

It doesn't look that way to me - it looks like you are in receipt of a deduction of £12.60 tax, then having two lots of £8.42 credited to your pay. Why would they credit your pay?

I work in payroll they should be applying an uplift to your pension contributions if paying by salary sacrifice and match this themselves. Some employers share the NI saving the employer makes with you there is no obligation for them to do so but if they do this should also be uplifted.

They are deducting the pension contributions the minus figure you see for tax actually means the employee is being refunded some tax related to previous tax paid this tax year.

What does the maternity policy say? Mine carried on at the usual level based on my salary pre mat leave.

Sorry these in reply to @BernadetteRostankowskiWolowitz

Agree with @PensionQ22

Looks like they have messed up to me. They are only taking 4% of the college enhanced maternity pay into consideration.

If your pension is salary sacrifice they have to pay in the same in as before you went on Mat Leave. Thus means that they will have to make additional top-ups. When you were receiving full pay - your contribution should have been the same. As your pay dropped then their additional payments should have kicked in - and should continue until you get the unpaid part of mat leave (after 39 weeks). They are correct that smp isn't allowed to be sacrificed - this is why they have to make the additional contributions.

My employer has a similar set up for its pension and thats exactly what happend with me.

@BernadetteRostankowskiWolowitz oh in that case I have no idea! 🤣
I was just going by these updates I get on my pension profile (see attached)

it is confusing to the untrained eye 😬

@FlippityFlippityFlop thank you SO much for this explanation…that makes total sense to me. I was wondering why it wasn’t at the very least a full contribution while I was on full pay…
its so helpful to have this information to go back to them with if they don’t reply

yes I definitely need to read it again @nachoavocado , I sent it to myself from the system a while ago but I can’t seem to find it now on my emails. I’ve asked a colleague to find it and send it to my personal email …
when I did read it a while ago I can’t remember reading anything about pensions but we shall see when I get it back 😊

What’s your basis for saying that? I don’t believe it’s correct - if your contributions are not being made why would your employer need to make them up?

yes - @PensionQ22 is not correct. They don’t have to make your contributions at all and don’t have to make any employer contributions during unpaid maternity leave. The only exception to this would be if it said otherwise in your contract.

www.pensionbee.com/blog/2018/june/what-happens-to-your-pension-during-maternity-leave

Hi @MsPincher thank you for this and sending the article..it looks like they do still have to contribute the usual amount they did before though? Is that right?

So even if I’m only contributing £14 now or whatever, they should still be putting in £90? At the moment they are only putting in what I do it seems since I went off 4 months ago. See screenshot for example.

If it's a salary sacrifice payment the employer does have to make it up to the usual contributions themself. Otherwise the salary sacrifice agreement is not true for HMRC purposes. Lots of caselaw about this OP, a quick google will give you plenty to refer them to. Sadly some employers try to get away with stuff like this but they won't have a leg to stand on with HMRC. They can't cherry pick the parts of salary sacrifice they want to adhere to.

Salary sacrifice pensions are treated differently when you're on mat leave compared to pensions where you each just pay an amount in. This is because the rule for maternity leave is that all benefits continue during maternity leave except your salary. Salary sacrifice is deemed to be a benefit, therefore it continues. If you have enhanced mat pay then the sacrifice is shown in this. If you are on SMP only then this cannot be sacrificed, so the employee gets the benefit of the pension contribution without having to actually put anything in themselves.

In short, having a salary sacrifice pension scheme is a really good perk when you are on mat leave.

@MsPincher

That link refers to a non-salary sacrifice/exchange arrangement, which is different to the OP's scheme.

Salary sacrifice benefits need to continue while on statutory pay, which includes SSP and any other statutory payments, funded by the employer.

We have just implemented a new scheme and this was the advice from the pensions expert as well as our lawyers. It is backed up by information online but can't link from my phone easily.

Okay I’ve just got hold of the maternity policy. It’s 9 pages long but there isn’t any mention of pensions at all…does this mean any obligations on their contributions don’t apply?

I’ve found 1 mention. In the adoption leave policy …. Screenshot attached. Presumably this should also apply to me.

I think it's correct that the employer has to make up the full amount - I have had three maternity leaves and this was the case every time. In addition, I was sacrificing for childcare vouchers through the second two mat leaves and they had to pay the full amount of those into my CV account with no deduction from SMP. Believe me, they would not have done this had it not been legally required, as between pension and CV's it was a significant amount of money every month.