K EY P OINTS
If a person is on strike for a day or more

That day does not count for pension purposes unless the individual pays make-up contributions.

Make-up contributions are paid at a rate of 16%, there are no employer contributions.

You must give everyone a chance to make-up their contributions.

The individual has 30 days from their return to work to elect to pay make-up contributions or a longer period as you allow.

You must tell the Pension Fund if an individual has been on strike and chosen not to make-up the contributions.

If the person is paying AVCs they must be given the opportunity to continue paying the same level of AVCs through the strike period.

If the person is paying Additional Regular Contributions (ARCs) or Added Years they must make the payments they would have paid.

An information leaflet for use with employees is provided.

A method of dealing with this issue is suggested.
R EGULATION L INK
Detailed regulations apply. These are contained in regulation 20 and 22 of the Local
Government Pension Scheme (Administration) Regulations 2008 as amended.
An up-to-date version of the regulation is available on the Local Government Employers’
(LGE) website: http://timeline.lge.gov.uk/LGPS2008Regs/SI20110561/20080239.htm#reg20

P URPOSE
1. To provide guidance on dealing with pension contributions during strike action.
H ISTORY
2. This is the first Employers Guidance on this subject.
O THER R ELEVANT D OCUMENTS AND P ROCESSES
3. There are no other specific documents and processes linked to this issue. However, note the similarities and differences to the other processes (e.g. maternity, unpaid leave) where individuals have periods of no pay.
B ACKGROUND
4. During a period of strike you will have to decide what to do regarding pension contributions. This is relatively straightforward for employees not paying any additional contributions. Where the member is paying additional contributions it is more complex.
A PPLYING T HE R EGULATIONS
Definition of strike or trade dispute
5. These regulations apply if an employee is away from work as a result of a “trade dispute” within the meaning given in section 218 of the Trade Union and Labour
Relations (Consolidation) Act 1992.
Absence for less than a day
6. If the absence from work is for less than a day normal contributions will be payable on the pay that they do receive. The day will automatically be treated as pensionable service. Employers are not therefore required to do anything other than collect contributions and do the normal payover.
Absence for one or more days
7. Absence from duty due to strike action is initially treated in the same way as any other unauthorised absence, i.e. the service does not count for pension purposes. There is, however, a provision in the regulations which enables an employee to elect to make a payment to the pension fund in respect of a period of absence from duty because of industrial action.
8. This payment is the equivalent of 16% of the pay which the employee would have received but for the absence. If this payment is made, the period of absence will count as pensionable service.
9. There is no employer contribution payable.
10. It is the employers responsibility to make employees aware of the impact of strike on their pension and to give them the opportunity to pay the make-up contributions.
11. The individual has 30 days after they return to work to choose to pay or a longer period as you allow. You will need to decide when they “return to work” following a strike – see the Specific Guidance Section.

People paying Additional Regular Contributions (ARCs) and Added Years
12. Special arrangements have to be made for those people paying Additional Regular
Contributions (ARCs), Added Years and uprating pre-1st April 1972 service for lump sum purposes. The individual has to pay these contributions, based on a percentage of pay they will not otherwise be receiving, during a period of no pay otherwise they break their pension contract. As most payrolls take these as a percentage of pay it is likely manual intervention is needed to ensure correct contributions are paid. If there is a protracted strike period you may need to arrange to collect money from the employee to pay over contributions.
People paying Additional Voluntary Contributions (AVCs)
13. Special arrangements have to be made for those people paying AVCs. The individual has the choice of paying these contributions during a period of no pay. AVCs can be paid as a monthly lump sum or as a percentage of pay so it is likely that manual intervention will be needed to ensure correct contributions are paid in some circumstances. If there is a protracted strike period you may need to arrange to collect money from the employee to pay over contributions.
T HE P RACTICALITIES
Your Role
14. Your role is to make sure contributions are correctly collected and paid over and that everyone is given the opportunity to pay make-up contributions. Ideally everyone who has taken strike action should be written to individually. However, an alternative is to widely publicise the impact of strike on pension and give everyone the opportunity of sending in an option to pay “make-up” contributions. You can then decide what to do regarding the people who have not returned a form.
Publicising the Impact
15. We recommend you issue wide publicity through employee newsletters, Email lists, your intranet and other communication means so that all employees know the impact of the strike. A briefing document and option form can be found at Appendix A for your use. You will need to edit it to include the earliest strike date/s and put in the address the form should be returned to.
Dealing with regular contributions
16. If a person takes strike action you should ensure no regular employee or employer contributions are taken for that day.
17. If you have already taken contributions and are dealing with corrections retrospectively
(this is likely, particularly if you are dealing with short strikes) this may be easy or complicated depending on how your payroll system works. Be aware it may require manual intervention. We do recommend that you check a sample of cases to ensure it has been done correctly.
Dealing with other contributions
Added Years and Additional Regular Contributions
18.
If an employee is buying “added years”, paying Additional Regular Contributions
(ARCs) or uprating pre-1st April 1972 service for lump sum purposes must pay those additional contributions on the pay they would have received had they not been on strike regardless of whether or not they opt to pay the basic 16%. You need to work out how your payroll works and make appropriate adjustments to ensure the correct amount is paid. This may require manual intervention. We do recommend that you

check each case to ensure it has been done correctly. If you do not know what additional deductions are for please contact the Pensions Service.
19. If there is a prolonged strike and the employee is receiving no pay the individual will have to pay you contributions and you will pay over contributions and resolve the income tax issues.
Additional Voluntary Contributions
20. What to do with these depends on how people are paying and whether you are doing strike deductions retrospectively. We recommend that you accept your payroll defaults and if anyone queries the amount they have paid you sort it out retrospectively.
21. If there is a prolonged strike an alternative approach may be required. In these circumstances the individual will have to pay you contributions and you will pay over the AVCs and resolve the income tax issues.
Collecting the 16% make-up contribution
22. If you receive a form asking for the 16% make-up contributions to be collected you should do this as soon as possible. You should use your discretion as to when to act
(see specific guidance).
23. You can set a deadline for the latest receipt of a form. This should be no earlier than
30 days after the member returned to work.
24. The payment is based upon the pay the employee would have received but for the absence. The regulations do not prescribe how the 16% payment is to be made and it is open to the Employer either to require payment in one sum or to accept payment by instalments.
Informing the Pension Fund
25. Once you have collected the make-up pension contributions you pay them over to the
Pension Fund as employee contributions.
26. At the same time inform pensions, preferably electronically on an Excel spreadsheet, of everyone who has taken strike action and not opted to pay make-up contributions.
We need:

name,

national insurance number,

job reference

dates of strike action.
In addition

if someone has more than one job we need to know which job/s the action applied to.
27. We do not need to know who has taken strike action and paid make-up contributions.

S PECIFIC G UIDANCE
When to Collect Make-up Contributions
28. The pension regulations say a person must apply to make-up contributions within 30 of returning to work or the day on which he ceases to be employed (if he ceases to be employed without returning to work). However, you can allow a longer period at your discretion. There is no time-limit on when you have to collect the make-up contributions. This gives you quite a lot of discretion on when to act.
29. If you are dealing with a one-off period of strike there is no benefit of waiting. The main issue you need to consider is whether you will deal with the pension issues at the same time you recover pay. If you do deal with them together you will need to either wait the 30 days after the strike or be prepared to deal with additional options as they come in.
30. Given the current trends in local government for several short periods of strike over a longer period of an industrial dispute you need a plan to deal with this. You have a lot of discretion. You could deal with each period of strike separately or could opt to wait until the dispute has been settled before dealing with all of the strike periods. The latter approach would be acceptable if the total period is relatively short, however, if the industrial dispute is protracted, particularly if it goes over a tax year end administration would become difficult. We recommend:

If you are recovering pay, deal with the collection of the make-up contributions at the same time as far as possible;

Make sure all make-up contributions are collected by the end of the tax year;

Do not allow more than five days to build up
– otherwise you start getting substantial arrears;

Make sure your leavers process captures any cases where the individual leaves before make-up contributions have been collected.
P ENSION F UND C ONTACTS
For further advice and guidance on this topic:
Cambridgeshire Pension Fund, Employer Liaison Team
Telephone: (01223) 715611
Email: LGPSAdmin@cambridgeshire.gov.uk
Northamptonshire Pension Fund, Employer Liaison
Telephone: (01604) 366537
Email: pensions@northamptonshire.gov.uk

Appendix A: Leaflet and Form for employees.
Leaflet:

needs to be edited to include the address you need the form to be returned to

could be edited to be more specific on when you will collect contributions
Form needs to be edited to:

include the address you want it returned to; and

to make it specific for the dates of the strike action you are dealing with.

S
A
– T
I
O
Y
L
G
P
S
B
A Briefing For Employees in the Local Government Pension Scheme
T HE E FFECTS
…
… On your pay
Strike action is counted as unpaid absence. Pay for strike days will therefore be deducted.
… On pensionable service
If you are not paid, the pension contributions normally made by you and your employer will not be deducted. You will therefore have one less day of pensionable service
(i.e. 1/365 of a year less) than you would have for each day you are on strike.
The total amount of pensionable service you have when you retire affects the amount of pension you get – each day you lose will decrease your pension by a small amount.
… On final years pay
If you are in the last year before you retire (and in some cases the last three years) the total amount of pay you get in that year also affects the amount of pension you receive. For this reason Unions may exempt people from strike action if they are in their final year of work – contact your Union for information. If you do strike your final years pay may be affected .
… On additional contributions
If you are paying Additional Regular Contributions (ARCs) or Added Years you have to pay the amount you would have paid even if you get no pay, you need to make sure your employer does this. If you pay Additional Voluntary Contributions (AVCs) you have a choice on whether to pay the full amount.
K EEPING Y OUR P ENSIONABLE S ERVICE
The Pension Scheme Regulations allow employees to ‘make up’ contributions in order to count the unp aid days as pensionable service. The ‘make-up’ level is 16% of your unpaid salary. The table below gives indication of what 16% of a days pay is, how much is actually taken will depend on how your employer actually calculates a days pay.
Your Annual
Salary
£10,000
£15,000
£20,000
£25,000
£30,000
16% of days pay in 31 day month.
£4.30
£6.45
£8.60
£10.75
£12.90
16% of days pay in 30 day month.
£4.44
£6.67
£8.88
£11.11
£13.33

To take advantage of this option you must elect to ‘make up’ the contribution within 30 days of returning to work after striking.
M AKING UP Y OUR P ENSIONS
If, having read the information overleaf, you want to take up the option of making up your pensions you should complete the attached form and return it to your employer at:
#enter return address to be used#
Contributions will be collected as soon as possible after the dispute is settled. If you tick
Option B you will need to inform us of your wish to ‘make-up’ the service of any subsequent strike days.
Remember : You must have submitted a form within 30 days of the last strike day.
ONTACTING THE
ENSIONS
ERVICE
The Pensions Service can be contacted in any of the following ways if you want to discuss the pensions implications of the strike.
Use the contacts relevant to the Pension Fund you are a member of:
Cambridgeshire Northamptonshire Pension
Pension Fund Fund
By Telephone
Our general enquiries telephone number is:
(01223) 715445 (01604) 366537
By Email
Our general enquiries Email address is
By Post
Our postal address is: pensions@cambridgeshire.
gov.uk
Pensions Service
RES 1103
Cambridgeshire County
Council,
Shire Hall
Cambridge
CB3 0AP pensions@northamptonshire
.gov.uk
Pensions Service
Northamptonshire County
Council
John-Dryden House
8-10 The Lakes
Northampton
NN4 7YD

THE LOCAL GOVERNMENT PENSION SCHEME REGULATIONS
ABSENCE DUE TO A STRIKE
– OPTION TO PAY ‘MAKE-UP’ CONTRIBUTIONS
I wish to make a payment as prescribed by the above regulations in order that my period of absence due to strike on ##date## will count as Scheme Membership. I understand that contributions amounting to 16% of the pay I would have received but for the absence will be collected from my pay once this dispute is settled.
PLUS (for those paying Additional Voluntary Contributions (AVCs)
If I wish to reduce or increase the amount of AVCs paid over during the strike period I will contact you within a month of the above contributions being collected to arrange for an appropriate variation.
PLUS
Please tick ONE paragraph:
A. If I have subsequent absence due to the current dispute I also wish to make the payment arrangements as above with no further notification.
B. I have not yet decided if I will wish to make-up subsequent absences. I will inform you if I wish to.
BLOCK LETTERS PLEASE
Surname: ……………………………………. First names:…………………………………..
Pay Reference: ………………………… National Insurance Number: ……………………
Signature: ………………........................................................... DATE ..........................
This form should be returned within 30 days of your return to work to:
##Enter return address to be used##