Parental leave and pension contributions....

FelaniaMump

A friend has asked me about this query and I have an idea about it but need further input.....

The friend is going on parental leave in February, all set. The company she works for have now said she needs to pay her own pension contributions as well as theirs for the time she is on leave. This makes it unaffordable to take the leave at all.
The pensions authority website and advisor on their phoneline say they should be offering it as a option, rather than compulsory. An informal chat with a lawyer agrees. Company is stating it is not negotiable.

Anyone have any thoughts on the legality of this? My friends feeling is that the company is effectively stopping employees taking leave they are legally entitled to by making them pay large amounts up front before they can do so.

Liam D Ferguson

I'm a Financial Broker so I know about the pension side of things but not the HR or legal side. So I can tell you that there is no obligation on an employer to pay contributions to a pension scheme at all. An employer has to make a pension scheme of some form available to employees once they're employed for six months or longer, but there's no obligation on them to pay into it on behalf of an employee.

I've never heard of an employer making it obligatory that the employee pays the employer and employee contribution to a pension scheme and I've been in this business for nearly thirty years. I don't think they have a legal leg to stand on to be honest. They could certainly say that they won't continue to make employer contributions while your friend is on leave. But not what's been suggested.

You / she should have a chat with the Workplace Relations office. See https://www.workplacerelations.ie/en/

coylemj

FelaniaMump wrote: »

My friends feeling is that the company is effectively stopping employees taking leave they are legally entitled to by making them pay large amounts up front before they can do so.

That is exactly what is happening here. There is no obligation on anyone to pay pension contributions in any given month. So if an employee should choose to take a 'holiday' from paying contributions (whether they are at work or on paid leave), the employer can stop paying for the same period.

Riskymove

indeed this appears to make little sense

how can someone with no salary be expected to continue paying their own contributions, let alone the employers as well

from citizens information:

Taking parental leave does not affect other employment rights you have. Apart from the loss of pay and pension contributions, your position remains as if no parental leave had been taken

catrionanic

And I have had the opposite problem! I wanted to make contributions to my pension while on (unpaid) maternity leave and was told I'm unable to! Which essentially means that for each child i have, my pension suffers.

FelaniaMump

Riskymove wrote: »

indeed this appears to make little sense

how can someone with no salary be expected to continue paying their own contributions, let alone the employers as well
:

Yes, and upfront in a lump sum, as well. I can't see how this can be legal, they are effectively making employees pay thousands for the privelige of not earning any money for 4 months....

coylemj

catrionanic wrote: »

And I have had the opposite problem! I wanted to make contributions to my pension while on (unpaid) maternity leave and was told I'm unable to! Which essentially means that for each child i have, my pension suffers.

I can see how your employer might refuse to match your contributions if you are not being paid for this period. And the payroll system may not be able to handle you making voluntary contributions during a period when you are not being paid.

coylemj

FelaniaMump wrote: »

Yes, and upfront in a lump sum, as well. I can't see how this can be legal, they are effectively making employees pay thousands for the privelige of not earning any money for 4 months....

If you are taking unpaid leave, there is no earthly reason why your employer cannot handle both of you taking a holiday from making pension contributions.

Forcing you to make an upfront contribution which encompasses employee and employer contributions sounds like serious sharp practice.