1. Administering Local Government Pension Scheme for the United Kingdom
  2. Daily APP Proration for Sickness and Child-related Leave

Daily APP Proration for Sickness and Child-related Leave

APP (Assumed Pensionable Pay) proration compares pensionable pay and APP on a per-day basis for sickness and child-related leave periods.

The calculation uses daily pay amounts to determine whether pensionable pay exceeds APP and returns a consolidated result for a complete absence period.

  • For each day of qualifying child-related leave, the system checks pensionable pay against APP and uses pensionable pay when it is greater than APP.
  • Applicable to:
    • Ordinary maternity or adoption leave (normally weeks 1–26)
    • Paid additional maternity or adoption leave (normally week 27 -39)
    • Paid shared parental leave, paternity leave, and paid parental bereavement leave
    • Full paid sickness
  • Daily comparisons are consolidated and returned as a single result for the complete leave period.
  • For any days or sub-periods where actual pensionable pay is greater than APP, contributions (employee and employer) are calculated on the actual pensionable pay instead of APP.
  • APP remains applicable for parts of the leave where actual pensionable pay is not greater than APP.
  • Comparisons use the normal rate of pensionable pay applicable during the absence, including allowances that form part of pensionable pay; retrospective arrears are not recommended to be treated as part of the 'normal' rate.
  • Proration across mid-period absences is handled so contributions are calculated per relevant sub-period (for example, different pay or allowances starting mid-leave).

Predefined Rate Definition for Nonprorated Full-time Earnings

A predefined rate definition LGPS Annual Full-Time Nonprorated Earningsprovides the period-level salary data used by the APP proration logic to determine daily pay amounts across salary-change periods.

  • Administrators must add the contributors for each regular earning that should be considered by the APP proration.
  • The Periodicity should be set to Annually but there is no need to check the Return Full-Time Rate

A corresponding calculation Value Definition of type Rate Amount must be created and attached to the Pension Calculation Factor element so the pension calculator can use the rate. Run the Generate HCM Rates flow before running payroll so rates are available before calculating the payroll.