Access and fairness regulation changes (LGPS)

• The 15 days are calendar days and should not be adjusted to accommodate working days or part-time hours. It also means that members will no longer need to apply to buy back pension lost during a short authorised unpaid break. 

• This change does not apply to a period in which the member is unpaid because of a trade dispute (strike).  

• Compulsory contributions are based on ‘lost pensionable pay’ – the pay the member would have received if they had been at work on their ‘normal’ (contractual) pay.  

• Unlike Assumed Pensionable Pay (APP), normal pay does not include uplifts for previous non‑contractual payments (for example, non‑contractual overtime). 

• Lost pensionable pay is added to (not substituted for) actual pensionable pay. If a member receives some pensionable pay during a period of authorised unpaid leave (for example, a bonus or pay arrears paid during the period), the actual pensionable pay and lost pensionable pay should be added together to find the cumulative pensionable pay for the period.  

• Employer contributions should be based on your normal contribution rate for the year in which the leave is taken.  

• Member contributions are based on the member’s normal contribution rate. If they were in the 50/50 section immediately before the unpaid period, the 50/50 (reduced) rate also applies to the compulsory contributions for the unpaid period. 

• Any pay reduction because of unpaid leave is ignored when allocating the member to the correct contribution band. These amendments do not change that provision.  

• Contributions may be compulsory where an employee has purchased additional annual leave, if the employer treats it as unpaid leave. In these cases, members will not need to set up an Additional Pension Contribution (APC) contract to buy back pension ‘lost’ during the additional leave. 

Payroll is not informed about the absence  

If payroll is not told about the unpaid absence in time, pension contributions will be deducted as normal on the pay actually paid. Once the absence is known, you will need to correct this in a later pay period to reflect the unpaid leave. Any correction must not reduce the pensionable pay or the member and employer contributions reported for that later pay period. 

The length of absence changes  

Make sure payroll always holds the most up-to-date absence dates so the unpaid leave is treated correctly for pension purposes. When deciding whether compulsory contributions apply, you must look at the total length of the authorised unpaid break (in calendar days), not just the part that falls within a particular pay period. If an absence was expected to be 14 days or more but is shortened so the total break is less than 15 days, you may need to adjust the contributions. 

Not enough pay to deduct contributions 

In some cases, there may not be enough pay in the relevant pay period to deduct the compulsory contributions (for example, where the member is paid weekly, or the unpaid leave follows another unpaid period such as unpaid sickness absence or unpaid maternity leave). You must have a process to ensure any outstanding compulsory contributions are deducted and paid to the relevant fund as soon as possible after the unpaid break. 

• You must include lost pensionable pay, and the employer and member contributions due on that lost pensionable pay, when you submit your monthly return. 

• For members in the 50/50 section, you must report pensionable pay and member contributions separately from pay and contributions in the main section. 

• LPPA does not need you to show lost pensionable pay separately from pensionable pay the member actually received. Where authorised unpaid leave lasts less than 15 days, you should not need to submit any additional data to LPPA beyond the monthly return. 

Lost pensionable pay is included when calculating the pension the member builds up in the CARE scheme. This means the member builds up the same pension as if they had received their normal pensionable pay during that period. 

This type of authorised unpaid leave (less than 15 days) does not affect final pay. If a member with final salary benefits or underpin protection takes this leave in the final pay period, there is no adjustment – final pay is worked out as if the member had been at work on normal pay. 

It also does not affect 85-year rule protection. The unpaid period still counts when working out the member’s calendar length of membership.

A QAPA is an arrangement to buy back pension lost during an authorised absence and applies in the following situations: 

• The member has a single continuous period of authorised unpaid absence lasting more than 14 days. 

• The absence is not due to illness or injury, child-related leave, or reserve forces leave. 

• The member elects to pay additional pension contributions to cover all or part of the unpaid period. 

• The member makes the election while in the same employment as when they were absent, and within 12 months of returning to work. 

• The employer may allow a longer period for the member to make an election.  

The period of absence that a QAPA relates to is known as the ‘qualifying period of absence’. The additional pension credited to a member with a QAPA is known as ‘qualifying additional pension’.  

The 14 days are calendar days and must not be adjusted to accommodate working days or part-time hours when working out whether an unpaid break. 

If an authorised unpaid absence lasts longer than 14 days, no compulsory contributions should be deducted. The member can choose whether to pay contributions to cover the period. The rules that apply when an authorised absence is less than 15 days do not apply to the first 14 days of a longer absence.  

Employers and members contribute to the cost of a QAPA:  

• The member pays the contributions they would have paid if they had not been absent. They pay the reduced rate if they were in the 50/50 section immediately before the absence and have not moved back to the main section (in accordance with regulation 10(3) or (5) of the 2013 Regulations). 

• The employer pays the contributions they would have paid if the member had not been absent.  

Employer contributions should be based on your normal contribution rate for that employer for the year in which the leave was taken.  

Member contributions should be based on your normal contribution rate. A pay reduction because of unpaid leave is ignored when allocating the member to the correct contribution band. 

Employer contributions to a QAPA are compulsory if the authorised absence is less than or equal to three years. Employer contributions are compulsory for the first three years of an absence of more than three years. Employers may choose to contribute to the cost of buying back the pension lost in the unpaid period after the first three years. If the employer does not contribute to the cost of covering an unpaid break in excess of three years, the member may meet the cost. The arrangement is still a QAPA and the cost is the total member and employer contributions for the period. 

The QAPA arrangement must specify how much pension will be credited to the active pension account:  

• If the member is in the 50/50 section, this is 1/98th of the pensionable pay they would have received on normal (contractual) pay during the qualifying period of absence 

• Otherwise, this is 1/49th of the pensionable pay they would have received on normal (contractual) pay during the qualifying period of absence. 

If the QAPA is paid by regular contributions, the arrangement must specify the amount of extra contribution to be paid each scheme year and the additional pension to be credited at the end of each scheme year.

There is no change to the way an authorised period of unpaid leave of more than 14 days should be treated by payroll. No pension contributions are deducted in respect of the unpaid period.  

Members will no longer be able to use the calculator on the member website to work out the cost of covering the unpaid period for pension purposes. The employer may need additional information from payroll to be able to advise the member of their options.

You will need to advise your employee of their pension options when they take an authorised period of unpaid leave, for absences of 15 days or more that started after 31 March 2026:

• The start and end dates of the unpaid break. 

• The member cost to cover the unpaid period. 

• The cost per pay period, if the member chose to pay by regular contributions over one, two or three years (where the amount is large). 

• The additional pension the member would be entitled to if they make the payments, and the additional pension to be credited each scheme year if they pay by regular contributions. 

If the member elects to enter into a QAPA, you will need to share this information with LPPA and confirm the following:

• The employer contributions payable. 

• When it will be paid, if paying by lump sum. 

• The pay frequency, if paying by regular contributions, along with the member and employer contributions per pay period and the length of the contract.  

The Local Government Association (LGA) has published a QAPA calculator for employers to work out the cost of buying back ‘lost’ pension. 

Important: before you use the calculator (which can be accessed via the ‘inputs’ tab in the spreadsheet) please review the General Notes tab, which explains the rules that apply to an authorised absence of 15 days or more that (effective from 1 April 2026), along with Spreadsheet notes about how to use the spreadsheet.  

On completion, use the Member Options or Member lump sum only tab to send the quote to the member for them to sign and agree. 

Upload a copy of the completed Info for LGPS fund tab via the UPM employer portal, using the Submit General File process along with a copy of the member’s election to proceed with the QAPA. This will provide LPPA with the full details of the QAPA.  

These changes only apply to relevant unpaid periods that start on or after 1 April 2026. If shared parental leave is taken in separate blocks, the date that an individual continuous period of unpaid shared parental leave starts is used to assess whether the new rules apply.

Assumed pensionable pay (APP) applies during a period of child-related leave. So, APP will apply during the following types of leave, if the unpaid period starts on or after 1 April 2026:

• Unpaid additional maternity leave. 

• Unpaid additional adoption leave. 

• Unpaid shared parental leave.  

APP will apply during these periods in the same way as it applies during any current period of child-related leave:

• The member pays contributions on any pay that they receive 

• the employer pays contributions on APP 

• the employer reports APP as the member’s pensionable pay to the administering authority for the period.  

This does introduce a new circumstance in which a member in the 50/50 section must move to the main section at the beginning of the pay period the day after they go onto no pay during child-related leave.

• You must ensure that APP is applied during periods of unpaid additional maternity leave, unpaid additional adoption leave and unpaid shared parental leave that starts on or after 1 April 2026.  

• You should report APP to LPPA for this period and deduct employer contributions based on APP.  

• You should review and update your processes to ensure that a member who is in the 50/50 section is moved to the main section if they start unpaid shared parental leave, unpaid additional maternity leave or unpaid adoption leave on or after 1 April 2026. This only applies if they are still unpaid at the start of the pay period after the nil pay period starts.