From 1 April 2026
APP to apply to unpaid additional elements of adoption/maternity/shared parental leave
- Assumed pensionable pay (APP) to apply during unpaid additional adoption leave, unpaid additional maternity leave and unpaid shared parental leave. APP will apply during these types of absences only if the unpaid period starts after 31 March 2026.
The current rules will apply to any unpaid additional maternity or adoption leave, or unpaid shared parental leave that started before 1 April 2026 (please note these periods were previously not covered by APP and instead the employee had the option to buy back the lost Pension via an Additional Pension Contribution (APC).)
Compulsory pension contributions during the first 14 days of authorised unpaid absence
- Compulsory pension contributions during authorised unpaid absences of 14 days or less, with contributions based on ‘lost’ pay and the member and employer’s normal contribution rates. This applies to authorised absences that start after 31 March 2026.
The current rules continue to apply to an unpaid break that started before 1 April 2026.
Qualifying additional pension arrangements (QAPAs)
- The cost of buying back pension ‘lost’ during a period of authorised unpaid absence of more than 14 days to be based on the member and the employer’s normal contribution rates. These contracts will be known as QAPAs.
- The time limit to apply for a QAPA will be one year after returning to work. This is an increase from the current limit of 30 days but will only be possible while the member is an active member in the same employment.
- Allowing employers to contribute to the cost of the QAPA for the whole of an unpaid absence that lasts more than three years.
- The pension bought though QAPA will mirror normal pension built up: it will count towards the calculation of survivor pensions and will not be reduced if the member retires on redundancy or efficiency grounds.
- These new rules will only apply to a continuous period of authorised unpaid absence that started after 31 March 2026.
The existing rules will continue to apply to unpaid breaks that started before 1 April 2026 and those details are:
- Cost to buy ‘lost’ pension is based on Additional Pension Contribution (APC) age related factors.
- Employer funds two thirds of the cost if the member elects to buy the lost pension within 30 days of returning to work (or such longer period allowed by the employer).
- Added pension reduced on redundancy or efficiency retirement before Normal Pension Age.
- The added pension does not count towards survivor pensions.
Over the coming weeks we will be updating our website and materials to reflect the above and will inform you accordingly.
If you have any questions or need further assistance, please contact us via our dedicated employer contact form
