News and Press
Pension contributions - salary or a benefit?

Following changes to the Sex Discrimination Act 1975, employers are now obliged to provide benefits for the full 12 months of maternity leave. It is not clear from Government guidance, however, whether an individual's pension needs to be paid for the full 12 months of maternity leave.

Catrin Young, a pensions specialist at TLT, says "The act defines remuneration as benefits that consist of the payment of money to an employee by way of wages or salary. The question, therefore, is whether pension contributions can be classed as wages/salary or benefits.

There are strong legal arguments that pension contributions are neither wages nor salary and are a benefit which should, therefore, be continued through the entire 52 weeks of maternity leave. Unless and until the Sex Discrimination Act is amended to explicitly state that pension contributions are remuneration, employers run the risk of claims for sex discrimination if they stop making pension contributions through unpaid maternity leave."