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Question: Now that we have gone through our auto enrolment staging date, what happens about employee pension contributions when someone goes off on maternity leave?

So during maternity leave the company must continue to make its employer contribution based on the percentage of the employees salary, before she went off on maternity leave.  Employer contributions should not be based on a percentage of the SMP payments that are being made as that would be seen as discriminatory.


The company should continue to make their employer pension contributions for the 39 weeks that the lady is receiving SMP.  Employer contributions can cease after the 39 weeks until the employee returns to work.
As for the employees contribution, the lady has two choices as detailed below and ideally you should talk to her about these options before she goes off on her maternity leave:-

Option 1 – the employee can opt to have her percentage employee pension contributions deducted from her SMP payments in the months where her salary is sufficient to meet the minimum earnings to trigger for auto enrolment.  As the earnings trigger is more than £112 per week, currently, it wouldl therefore be deducted for the first 39 weeks of the maternity leave.

Option 2 – the employee can make up the pension contribution paid in option 1, to be equivalent to the contribution she would have paid on her pre-maternity salary by making an additional pension contribution for the difference. Depending on the lady’s salary, this may involve her making an additional contribution each month to her pension provider if there is sufficient money to take the full amount from her SMP payments.

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We can help you hire and retain the best employees, manage your employees more successfully, and improve employee motivation. Whatever your HR outsourcing needs, In2HR can assist any company within the Thames Valley areas, including Berkshire, Buckinghamshire, Oxon and Surrey. So why not contact us today.

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