Pension contributions during Maternity Leave..

[Mitcher]

Hello

We've had an employee on Maternity Leave. She took the full 52 weeks, so the last 13 weeks were unpaid. I know that an employee's contribution is based on a percentage of their salary; is this percentage a fixed amount? I'm really trying to work out if our employee should have had a 3-month or a 2-month holiday from contributions. Her 39 unpaid weeks began on 16 August 2010 and her Maternity Leave ended on 12 November (technically, 14 November, which was a Sunday). So, in August she only earned roughly 2 x £128-odd statutory pay. She normally earns £21,660 and pays £30 a month to her pension. Her pension contribution was paid in September, as she said that the contributions had been deducted from her salary in August. (Our Accountants were doing our payroll.) Did we work things out correctly? Originally, I had thought there would be a 3-month holiday, but it ended up only 2 months and I'm just querying if we calculated correctly.

I'd appreciate your help. Thanks, in anticipation.

Mitcher

 

[Merlion ABS]

Have you paid her any holiday pay? as far as im aware even though she is on maternity leave, she will accrue holiday entitlement.

This means the last 13 weeks are not unpaid, but some of it is rather holiday and she should be paid holiday pay which attracts tax and NI as normal.

One of my clients had a girl on Maternity, We paid her 39 weeks SMP, then she took her holiday at the end which was 30 days (22 + 8 Bank holidays).

Worth looking at.

 

[Tom McClelland]

Merlion's point about holiday pay is valid. And remember that it is your responsibility to pay an employee to take holidays (even when they've been on SMP), not their responsibility to request those paid holidays.

On the pension front it probably depends what the specific terms of the pension scheme and employee contract say.

 

[Mitcher]

Hi
We offered her accrued holiday pay and she took some of it in November, which meant that she basically had her full month's salary in November. I can only assume that all tax, etc, was paid correctly.

I doubt if it's worth the bother of actually rectifying any mistakes in calculations. It's only a niggle because the employee in question was a real pain right through her M/L, starting with a grievance and then making a right fuss about her pension contributions, and continuing with other annoyances.... It would just have been nice to have had some high moral ground from which to graciously waive any extra payments made! (Sorry, but I've aged 10 years in the last 14 months and it's mostly down to this one employee. No doubt, I'm a better person for it! Ha!!)

You may have guessed that I'm a total ignoramus regarding pensions, as I've never had one. I understood that a personal contribution was based on a percentage of her salary; is that incorrect?

Mitcher

 

[Tom McClelland]

You may have guessed that I'm a total ignoramus regarding pensions, as I've never had one. I understood that a personal contribution was based on a percentage of her salary; is that incorrect?
Mitcher

According to this link...

http://www.pensionsadvisoryservice.org.uk/pension_rights/maternity_&_paternity_leave

... the employee continues to pay their own contributions at their normal percentage rate of their SMP. Meanwhile (I should be astonished, but I'm not) the employer must continue to pay employer contributions into the pension scheme as if the employee were still earning their full normal amount.