It’s spring! We are all thinking of new life and new beginnings. So, talking about all this maternity and paternity feels hopeful and optimistic. While your teachers’ pension is probably not high on your list of priorities when it comes to having a new baby, we thought we would explore the impacts, so all your bases are covered.
What happens to my pension when I am on leave?
If you take paternity or maternity leave, you will likely still receive contractual or statutory pay. Consequently, you will still be in pensionable service and the number of years of this service will continue to increase.
During your leave, your pensionable earnings may be reduced and so your pension contributions, being a proportion of your earnings, will reduce too.
What happens if I extend my leave beyond contractual and statutory limits?
It might be that you decide to take a longer break than you are contractually permitted to do. If this is the case, there are factors you will need to consider.
- If you are not receiving any pay, then you are no longer an active member of the Teachers’ Pension Scheme.
- You will not be entitled to the Death in Service benefits, as you are not an active member of the pension.
- You will be considered a deferred member until you return to active service. If you leave for less than five years, active member indexation will be applied when you return.
The benefits for your children in the future
While this might feel like the last thing that you want to think about, your pension does offer some benefits for your children. If you were to die, your children will receive a pension until they are 23 if they stay in education. Your spouse would also receive a pension and a lump sum that could help in the care of your children.
The content in this article was correct on 19th April 2021. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.