The Pensions Trust - Online Trust Deed and Rules
Final Salary Scheme Rules
    you are here: Home > Trust Rules > Defined Benefit Scheme Rules > Rule 12: Temporary Absence

Rule 12: Temporary Absence

 PART 1: Up to one year

12.1Interpretation

This Rule applies where a Member whilst remaining in the service of the Employer is absent from work, either without pay or on reduced pay, for a period (except where modified by Part 2 of this Rule) not exceeding one year, and the absence is:

(a) due to illness or injury, or on Unpaid Family Leave, or

(b) where Rule 11.6 (arrears of contributions) applies, or

(c) otherwise agreed between the Employer and the Trustee or the Pensions Committee, as the case may be.

12.2Options

Except where the Employer agrees that contributions from the Member shall not be required, the Member may elect either that:

12.2.1 Contributions

The contributions payable by the Member and the Employer during the period of absence shall be calculated (a) on the Member's pensionable Earnings immediately before the absence commenced, or (b) on the Member's reduced Earnings, or (c) on such other Earnings as may be agreed between the Member and the Employer, if the Member elects to pay the contributions due the Employer shall be asked to pay its corresponding contribution but is not obliged to do so; or

12.2.2 No contributions

The Member shall not contribute during the absence in which case the Employer shall not be required to contribute in respect of the Member for the same period except for contributions for lump sum death benefits. If the Member dies in this period, Rule 12.5.2 shall apply.

12.3Death benefits

Any lump sum death benefit under Rule 14 shall continue to apply to the Member during temporary absence and shall be calculated by reference to the Member's pensionable Earnings immediately before the absence commenced.

12.4Non-contributory scheme

If a Scheme is non-contributory for Members, this Rule 12 shall apply as appropriate except that the period of temporary absence shall not be counted as Pensionable Service unless specified in the Scheme Document.

12.5Benefits after absence

If the Member has chosen not to contribute or has paid reduced contributions during temporary absence, on return to work, the Member shall elect either:

12.5.1 Payment of arrears

To pay, over a period agreed with the Trustee, the contributions under Rule 12.2.1 above due for the period of absence. If the Member elects to pay the contributions due the Employer shall be asked to pay its corresponding contributions but is not obliged to do so. Benefits shall be provided of such amount as the Trustee, after obtaining Actuarial Advice, determines to be appropriate, having regard to the contributions paid . Or:

12.5.2 No payment

Not to pay contributions, in which case Scheme benefits payable to or in respect of the Member (except any lump sum death benefit) shall be reduced in such manner as the Trustee, after obtaining Actuarial Advice, decides is appropriate. Rule 6.4.1 (Earnings) applies.

12.6Different earnings

Whether after temporary absence for up to one year, or for more than one year as provided below, if the Member's contributions are resumed for part-time employment, benefits shall be calculated subject to Rule 6.5 (part-time ratio) as appropriate. If the Member resumes lower paid full-time employment, then (subject to the Member's written consent) Rule 9 may be applied as if the Member had withdrawn from Pensionable Service on the day before such lower paid employment commenced.

12.7Continued absence

If the Member remains absent at the end of one year (or such other period as the Rules allow), without pay or on reduced pay, Rule 9 shall apply as if the Member had withdrawn from pensionable service at the end of the one-year period (or agreed longer period), or if earlier, the date the Member's contributions ceased.

 
PART 2: More than one year and PHI, etc

12.8Full membership

The Trustee may agree that a Member who is absent from work and receiving benefit under the Employer's permanent health insurance scheme (or as allowed under Rule 12.9 below) may be retained in full membership of the Scheme for more than one year but not beyond Normal Pension Age, and:

12.8.1 Growth Plan

Where contributions are not paid in accordance with the following options, with the agreement of the Employer, the Member may be transferred (except for lump sum death benefits) to the Growth Plan.

12.8.2 Contribution options

Contributions payable by or on behalf of the Member and the Employer (including arrears for the first year under Part 1 of this Rule if appropriate) shall be calculated (a) by reference to the Member's Earnings immediately before such period of absence commenced, or (b) if greater, the notional salary on which PHI benefits are being paid. Where the Member pays contributions on any of these bases, full tax relief will be allowed. The Employer may decide in any case that only the Employer shall contribute on behalf of the Member and the Employer, and the Member shall not then be required to contribute.

12.8.3 Benefits after absence

(a) Provided the Administrator or the Pensions Committee (as the case may be) is satisfied that appropriate contributions have been paid, Pensionable Service will be continuous and benefits shall be calculated with reference to the Member's Earnings immediately before such period of absence commenced or, if greater, the notional salary on which contributions are being paid at the time of the Member's death or retirement.

(b) If the Trustee or the Pensions Committee is not satisfied that appropriate contributions have been paid, benefits will be provided of such amount as the Trustee, after considering Actuarial Advice, determines to be appropriate, having regard to such contributions as were paid. Rule 6.4.1 (Earnings) applies.

12.9Matrix Options: temporary absence

Option 231 - Up to 3 years

The period for which Part 1 of this Rule 12 can apply shall be three years (or as otherwise specified in the Scheme Document) instead of one year but the Scheme Document may provide that Rule 12.3 (Death benefits) shall not apply for more than one year.

Option 232 - Illness, total period

A Member may be retained in full membership for the whole period of absence due to illness or injury whilst remaining in the service of the Employer without pay, subject to the payment of such contributions by the Employer as the Trustee or the Pensions Committee (as the case may be) shall require. Benefits will be calculated by reference to Rule 12.8.3.

Option 233 - Training or study, total period

A Member who is absent from work without pay due to participation in a course of study or training approved by the Employer, whilst remaining in the service of the Employer without pay, may be retained in full membership for the whole period of absence, subject to the payment of such contributions by the Employer as the Trustee or the Pensions Committee (as the case may be) shall require. Benefits will be calculated by reference to Rule 12.8.3.

Option 234 - Other absences

In circumstances of sabbatical leave, secondment or temporary absence other than described above, Part 1 of this Rule 12 shall apply for up to one year.

Option 235 - Pensionable Service

During any period of temporary absence, unless the Employer notifies the Trustee or the Rules otherwise provide that the Member shall not be required to pay contributions, the Member pays contributions on Earnings received. The period will count as Pensionable Service subject to the payment of such contributions as the Trustee or the Pensions Committee (as the case may be) shall require, in which case benefits will be calculated by reference to Rule 12.8.3.