Work Changes and Your Pension

Changes to your circumstances could have an effect on your pension. In this article, we aim to delve into the most common events that might occur during your work life and take a look at how these can in turn impact your pension pot.

Sick Leave

You continue to pay pension contributions on any pay you receive while off sick. If you are on unpaid sick leave, you will not pay any contributions but you will continue to build up pension during this time.

You will never lose out on your pension during sick leave. When calculating how much pension you build up during your sick leave, we use your assumed pensionable pay. This is simply the pay you would have received had you not been off work. This allows you to continue building up your pension as though you were working normally, and ensures you will not be penalised due to ill health.

Essentially when you are off sick, you are treated as if you are working normally, paying your contributions and building up your pension.

Maternity, Paternity and Adoption Leave

If you are off on maternity, paternity or adoption leave, you will continue to pay your basic pension contributions on any pay you receive and your pension will continue to grow.

During any period of relevant child related leave, your assumed pensionable pay figure is used to work out your pension. Your assumed pensionable pay is simply the pay you would have received if you were working as normal and means you will continue to build up pension as though you were working normally.

However, during any period of unpaid additional maternity, unpaid adoption leave or unpaid shared parental leave, you will not build up pension. If you wish to reimburse your pension, you can elect to pay Additional Pension Contributions (APCs) to purchase the amount of pension lost during your period of unpaid absence.

Leaving or Opting out Before Retirement

If you leave your job, or opt out of the pension scheme before your pension can be paid, you may have to make a decision on what to do with it. Depending on how long you have been a member, your options will vary:

If you have 3 or more months membership but less than 2 years and no other LGPS benefits in Scotland, you may be able to:
- Get a refund of your contributions, or
- Transfer your pension to another provider
If you have 2+ years membership or less than 2 years but you have LGPS benefits elsewhere in Scotland, you may be able to:
- Transfer your pension to another provider, or
- Leave your pension with us until it can be paid to you - this is known as "Deferred" pension benefits.

We will contact you upon leaving to let you know what options you have.

Contract Changes

Any changes to your work hours, work pattern or contract may affect your pension. The impact on your pension will depend on the exact circumstances of your contract change.

If you move from full time to part time hours, your pay will reduce and therefore so too will the amount of pension you build up from that point onwards. However, this will not usually impact any final salary pension you have (pension built up before April 2009). Alternatively, if you start a new job but keep your current one, a new pension account will be opened for your new contract and will run alongside your existing one.

More information on the ins and outs of work changes can be found here. If you have a query relating to your own circumstances, you can contact us here.