The pension accrual of a member of the Teachers’ Pension Scheme will not be affected while they’re on maternity leave, paternity leave, adoption leave, parental leave or shared parental leave. Such members will pay less by way of contributions as, although the contribution rate is based on the pre-leave usual rate of pensionable earnings, it is only applied against the statutory pay or any pay which is at least half their pre-family leave salary. Valuable life cover will also continue.

New mothers, for example, who receive statutory maternity pay for a period up to 39 weeks’ will pay pension contributions at a rate based on the pre-leave earnings but only on their statutory pay or any pay which is at least half pay. But, during this period, pension benefits continue to accrue based on the higher pre-maternity salary and any death grant in respect of a person on maternity leave or family leave will be treated as ‘in-service’. This means the death grant will be based on a person’s full-time equivalent salary prior to going on family leave, even if the maternity or family leave pay falls to nil pay.

These are valuable benefits, yet we’re aware that some members going on family leave are choosing to opt out. While an individual may have ceased paying pension contributions, they are losing out on valuable pension accrual and risk benefit cover.

Please encourage members going on family leave to take independent financial advice before they opt out of the Scheme.