20 April 2026
Pension treatment during periods of Statutory pay, such as sick, or family related leave including Statutory Maternity Leave (SML), Statutory Adoption Leave (SAL), Shared Parental Leave (ShPL) and Statutory Paternity Leave (SPL), is a frequent source of payroll error and employee queries.
The rules are not governed by a single piece of legislation but sit at the intersection of employment law, pension scheme rules, auto-enrolment duties, and where applicable, salary sacrifice arrangements.
Please see the chart below, showing how contributions are calculated and what must continue by law, and why it is vital that scheme rules are always checked alongside regulatory requirements.
|
Area |
Family-Related Statutory Pay |
Statutory Sick Pay |
|
Legal protection for benefits |
Yes – is a contractual benefit. |
No – no requirement to continue contractual benefit. |
|
Employer pension must continue |
Employers must continue pension contributions for the whole period of paid statutory leave (including any enhanced pay period), based on the employee’s normal pre-leave salary, unless the scheme rules or contract are more generous. |
No statutory rules guaranteeing continued pension contributions during sickness. Contractual / scheme rules govern whether employer contributions continue and on what reference salary. |
|
Basis of employer contributions |
Based on normal pre-leave salary for the period of paid statutory family leave. |
Typically, on actual pay received during sickness (company sick pay or Statutory Sick Pay (SSP)). |
|
Employee contributions |
Based on actual pensionable pay received during leave, plus any contractual enhancement. Don’t deduct from notional pay. |
Generally based on actual pay during sickness (company sick pay or SSP), unless the scheme expressly maintains pensionable pay at a higher notional level. |
|
Active scheme membership |
Continues. |
Depends on contract / rules. |
|
If pay is too low to deduct |
Employer contributions continue irrespective of employee contributions. |
No. |
|
Unpaid additional maternity leave or unpaid family related leave |
Employer is not required to continue pension contributions, unless this is contractually agreed or built into scheme rules. Employee contributions normally stop, because there is no pay to deduct from. |
No. |
|
Salary Sacrifice Schemes |
This is a contractual benefit so employers must continue the post-sacrifice contribution based on notional pay, with sacrifice suspended where pay is too low (without reducing statutory pay).
|
There is no statutory obligation to maintain salary sacrifice. Most arrangements pause when pay is low.
|
To find out more, please register to attend our BeKnowledgable in June 2026, where we will be exploring this topic in much further detail.
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