Pensionable employment meaning

Legislation safeguards the pension entitlements of members of occupational pension schemes and other employment‑related benefit arrangements, including workplace personal pension schemes that receive employer contributions, while they are away from work on statutory family leave. Statutory family leave encompasses: maternity leave paternity leave adoption leave parental leave shared parental leave parental bereavement leave carer’s leave Maternity leave Occupational pension schemes are taken to include a maternity equality rule requiring periods when a member is on maternity leave to be treated in the same manner as periods when they are not on maternity leave. This maternity equality rule applies to both paid and unpaid ordinary maternity leave (OML), as well as to paid additional maternity leave (AML). As a result, under this rule, time spent on OML and paid AML in a defined benefit (DB) scheme is recognised as pensionable service...

Original news Mr E (CAS-63587-P0K4)—22 September 2025 Summary The Pensions Ombudsman upheld a complaint concerning inaccurate information supplied by a pension scheme. Relying on the mistaken figures, the member left his role and proceeded to buy a home with a mortgage. As he had been expressly assured that the numbers were correct, the scheme could not fall back on the disclaimer contained in the benefit statement. The determination serves as a reminder that pension schemes cannot invariably place dependence on disclaimers in benefit statements. What were the facts? Mr E was a member of the Teachers’ Pension Scheme (the Scheme). His employment record was complex, including an opt‑out from 1990 to 1994 that was later reinstated. In 2014, a system fault caused the Scheme to wrongly credit Mr E with an extra five years of pensionable service. His May 2012 statement, which carried a disclaimer, quoted an annual pension of £15,886; by February 2014, the estimate had risen to over £21,000. Accordingly, the complaint succeeded. Those misapplied...

Original news Professor G (PO-17403) – 23 January 2024 Summary The DPO upheld a complaint about a public sector scheme that wrongly advised the complainant he could remain an active member past age 60. Suggesting he could, on an exceptional basis, continue to accrue benefits amounted to a negligent misrepresentation. It was also a breach of the duty to administer the scheme in line with the statutory regulations. The case serves as a reminder that scheme providers should not promise benefits that are not authorised by their scheme rules... What were the facts? Professor G became a deferred member of the NHS Pension Scheme (the Scheme) in 1985. NHS Business Service Authority (NHS BSA) was the Scheme’s administrator. The NHS Pension Regulations 1995 (the Regulations), SI 1995/2008, stated that members could not accrue further pensionable service or pay contributions in the Scheme after age 60. In April 2000, when he was over 60, Professor G received an offer of employment from a new NHS employer indicating...

Summary The Deputy Pensions Ombudsman has dismissed a grievance concerning whether unpaid leave counted as pensionable service for an individual holding protected person status following electricity privatisation. Although the claimant’s electricity pension arising from privatisation was safeguarded by statute on employment transfer, that safeguard did not cover provisions treating periods of unpaid absence as pensionable; the Deputy Pensions Ombudsman viewed that as a discretionary facility. The decision underlines the need to separate enforceable rights from employer or scheme discretions for electricity sector members benefiting from protected person safeguards. What were the facts? Mr Y previously belonged to the Capita Pension and Life Assurance Scheme (the Capita Scheme) and the ATOS UK 2011 Pension Scheme (the ATOS Scheme). He had earlier worked within the electricity industry and qualified as a ‘protected person’ under the Electricity (Protected Persons) Pensions Regulations (Northern Ireland) 1992 (the Regulations). By virtue of the Regulations, Mr Y was assured pension rights no less favourable on any change of employer whatsoever occurring...

Reducing the financial burden of defined benefit schemes on employers In recent years, a growing number of employers have sought to avoid or curb their exposure to the increasing costs of defined benefit pension schemes and the risks inherent in running them. To achieve this, many have either restricted entry to their defined benefit scheme—so that no new members are admitted—or, in more severe instances, closed the scheme to the future build-up of benefits. Alternatively, employers may look to amend the scheme’s operating provisions so that benefits accrue on a less generous footing. Each approach aims to limit costs and the scheme risks. One approach is to redesign the scheme so members cease to accrue benefits on a 'final salary' basis (i.e. by reference to pay at, or close to, the date their pensionable service ends) and instead on a 'career average' basis (i.e. by reference to pay averaged across a defined period, typically the member’s period of active participation in the scheme). Making a change of this nature...

Specific measures usually operate to secure a basic level of pension protection for employees whose roles are compulsorily transferred from central government to private sector contractors due to the outsourcing of services. These safeguards are commonly known as ‘Fair Deal’. Fair Deal protection—background history Fair Deal guidance first appeared in Annex A of the HM Treasury Guidance ‘Staff Transfers From Central Government: A Fair Deal for Staff Pensions’, issued in June 1999, and was directed solely at central government departments and agencies. This initial guidance (referred to as ‘old Fair Deal’ in this Practice Note) developed over time as follows: In January 2000, old Fair Deal was annexed to, and cited in, the Cabinet Office Statement of Practice ‘Staff Transfers in the Public Sector’ (COSOP), which was later revised in November 2007 and December 2013. This annexing was significant because the government expects public sector organisations—beyond central government departments, agencies and the National Health Service (NHS)—to follow COSOP. ...

THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL PENSION SCHEMES. There is no overarching legislation dictating how members’ pension entitlements must be handled during temporary absences from employment, save for the following carve-outs: time away under statutory family leave, including maternity, paternity, adoption, parental or shared parental leave—for details, see Practice Note: Maternity and other statutory family leave—the pension requirements interruptions in pensionable service ignored under preservation legislation when assessing if an early leaver has two years’ qualifying service—for details, see Practice Note: Early leavers—preservation — Breaks in pensionable service Beyond these, the approach to pensions during a temporary break will be determined by the scheme’s rules and the nature of the absence. Employment contracts may also set out particular arrangements for some absences (eg sickness). Accordingly, employers establishing pension provision for staff must decide how members’ pension rights are to be treated when work is interrupted temporarily, and should ensure the scheme’s trust deed and rules state, with clarity, how such rights...