Statutory Maternity Leave (SML)
SML for an employee is for 52 weeks. SML consists of
Ordinary Maternity Leave (OML) and Additional Maternity Leave
(AML). OML covers the first 26 weeks. AML covers the
next 26 weeks.
Statutory Maternity Pay (SMP)
SMP is payable for employees who:
- have been employed without a break for at least 26 weeks;
and
- remain employed into the 15th week before the week the baby is
due.
Part weeks count as full weeks. The employee must also be
earning, before tax, an average of £102 per week (2011/12
rate).
SMP is payable at 90% of average weekly earnings, with no upper
limit, for the first 6 weeks, and is then payable at the
£128.73 per week (2011/12 rate), or at 90% of average weekly
earnings, whichever is the lowest, for a further 33
weeks.
Therefore, SMP is payable for a maximum of 39 weeks. Some
employers may decide to pay more than the statutory minimum
amounts.
Impact on those in Final Salary and Career Average Pension
Schemes
Any paid maternity leave must be treated as pensionable service. Benefits are
based on the salary before going on maternity leave (this includes
any Death in Service benefit). Employee contributions are
based on actual pay, whilst the employer must pay a contribution
based on the salary the employee would have received had they not
gone on maternity leave. This includes the right to any pay
increase that would have occurred.
Any unpaid maternity leave which follows a period
of paid maternity leave does not count as pensionable
service. However, employment before and after the break must
be treated as continuous.
In some schemes, the employee can make up any unpaid leave by
way of extra contributions. In some generous occupational money
purchase schemes, as long as she returns from maternity leave and
remains in the scheme for a set period of time, the employer makes
up any missed contribution.
Impact on those in Money Purchase, Personal and Stakeholder
Schemes
A woman on paid maternity leave will continue to
pay contributions. The rate will apply to the amount of pay
actually received.
If the employer normally contributes to the plan, they will
still be required to continue contributing during paid maternity
leave. These contributions will be based on the pay the employee
would have received had she not gone on maternity leave. In
schemes where the rules state that the employer will match the
employee's contribution, the employer must still contribute at the
level the employee would normally pay and not what she is actually
paying during her maternity leave.
Any death benefits payable under the scheme must be based on the
same benefits as would have been paid had the employee been working
normally.
During a period of unpaid maternity leave, neither
the employee nor the employer will be expected to contribute.
The employee may, if she chooses, pay contributions during this
period but the employer will not have a duty to contribute (unless
their contract of employment states otherwise).
