Overview of Assumed Pay Absences

Assumed Pensionable Pay is the amount of pensionable pay the member would have received if they were not on reduced pay.

The contribution percentage (that is, tier) the member needs to pay must be calculated based on what their earnings would be if they were not on reduced pay. Employer deductions continue to be calculated during paid and reduced pay absences for every day that the absence is in pensionable service.

Assumed pay absences are identified in the application by the legislative grouping code associated with the absence type and the absence payment factor that applies at the time:

• Absence is paid at a factor of 1 (that is, they are fully paid) - their contributions tier continues to be based on their permanent pensionable pay.
• When the absence payment factor drops below 1 (on eligible absences) - the factor is assessed every time it changes to determine if the absence remains pensionable and the basis used for employee contributions.

Where some days of the period are non-pensionable (for example, the employee dropped from half pay to zero pay mid-month), proration is performed. Contributions are calculated for the pensionable days only.

Additional pension contributions continue to be calculated when an employee is absent unless the member elects to end the contract. Use arrears functionality and the regulation for a specific additional contribution type to determine how a contribution is handled when either a reduced or zero absence payment prevents a full contribution from being made. (Or arrangements are made directly with the employer to address the handling of any arrears).

Note: As if an absence is pensionable – so it’s a full pay or assumed pay scenario – there is no requirement to split the MCR period to reflect changes in pay.