Employers choosing to ignore guidelines on contributory pensions while on mat leave

[HumptyDumptyBumpty]

Hi,

I'm currently on maternity leave, and have been having a 'discussion' with my employer since before I started m/l, which we can't seem to resolve!

He wants to pay me a % of my SMP, and I pay a lower % of SMP as pension contributions. I was previously paying a % of my normal salary, and the employer did the same - slightly higher rate.

I've read, and been told by others, that there is 'guidance' suggesting that he ought to be paying as a % of my normal salary, not of SMP, whilst I pay a % of SMP.

He says that since it is 'only guidelines', he will ignore that and pay the lower rate,

Is there anything I can do? Or do I just accept that he's a cheap bastard and use this as the final push to look elsewhere?

I was under the impression that he had to pay employer's contributions based on your actual salary, otherwise you are losing out and therefore being penalised and treated differently because you're on maternity leave (so falling under the equality act). Hopefully Flowery or another expert will be along soon, but basically you shouldn't miss out because you're on Mat leave.

So you should contribute a percentage of your smp, and your employer should contribute a percentage of your pensionable pay prior to Mat leave.

The government website uses the word MUST not OPTIONAL

Employers must carry on with normal contributions for first 26 weeks. Give ACAS a ring for clarification.

It's 39 weeks (the period of paid ML) that employers must keep contributions up.

If you receive enhanced mat pay, they can deduct all or some of your usual contributions from that. They cannot make any deductions from smp. Your employer's contribution must be based on the contribution that they would have made had you not been on mat leave.

If you have a salary sacrifice scheme (ie you agree to a reduction in your gross salary in return for your employer making both your and their contributions - some employers offer this as it is tax advantageous), then the employer must continue making the same contribution that would have been made had you not been on mat leave. Again, if you are receiving enhanced mat pay, they can make the appropriate reduction to that as would have been made had you been at work. However, no reductions can be made to SMP. Hope this helps.

Just echoing, but to be clear:
No deductions can be made from SMP - they cannot give you any less than SMP for those weeks.
No reduction can be made from the normal benefits you receive as part of your other (additional to salary) remuneration. Be that pension, vouchers, gym membership or whatever. You get the same when on maternity leave as you do when you are at work.

Thank you! I knew it! Right, going to ring ACAS for ammunition (that website is ideal, but it's NI, not England, and they're weaselly) and reply to the latest email...

gobbo does that include student loan repayments, do you know?

Deductions can be made from SMP. It is pensionable and taxable. But things like court orders can't be taken from it, or childcare vouchers. not sure about student loans. But if smp means your pay is below the threshold for the year, you'd be entitled to have the whole year's payments back.

Pensions Advisory Service

Maternity Action see question on deductions

Sorry -chris is right re: deductions from smp for non-salary sacrifice schemes.

In that instance, what I should have said is that it is the usual percentile that can be deducted though. So, for arguments sake, if your salary is £2k per month and you normally pay 10% - ie £200 per month, then that percentile deduction can continue so 10% of you smp (or enhanced pay) can be deducted as normal

What couldn't happen is that the employer still takes the £200 monthly from smp.

Your employer should continue to make contributions based on your usual salary had you been at work though.

Sorry for confusion! The salary sacrifice explanation is right though!

Under salary sacrifice the law is most definitely not clear and has yet to be challenged. A reasonable employer will see that under salary exchange all contributions are ER and therefore payable by the ER when any enhanced pay has ceased, however other employers take a different stance. The words "grey area" tend to be bandied about. Even major law firms take differing stances between them on how they deal with employee pension contributions made using salary exchange when someone is on mat leave. Where I work we do not view it as a grey area, we meet full ER contributions when someone is on mat leave and in receipt of SMP only.

Phone maternity action, they are very good. ACAS advice can be a bit patchy IME but MA deal with this kind of thing all the time.