How Part-Time Service Quietly Distorts Public-Sector Pensions

1. How Part-Time Service Affects Your Pension

Public-sector defined benefit pension schemes are extraordinarily generous by private-sector standards — but that generosity is calculated on the basis of the service and earnings actually recorded in your file. Where your service is inaccurate, your pension will be inaccurate too, and almost always in one direction: lower than it should be.

Part-time service introduces two layers of complexity. First, the pensionable pay used in the benefit calculation must reflect your actual hours relative to the full-time equivalent for your role. Second, in final-salary schemes, the pensionable pay figure used at the point of retirement must properly account for any periods of part-time working when establishing your pensionable pay ceiling or your best-year average.

In career-average schemes such as the 2015 NHS scheme or the LGPS CARE arrangement, each year of pensionable pay is accrued and revalued separately, which means that an error in a single year's pensionable pay figure affects that year's accrual permanently — it does not get corrected by later full-time earnings.

2. Whole Time Equivalent Pay and Why It Matters

In the NHS pension scheme, pensionable pay is calculated on the basis of your Whole Time Equivalent (WTE) salary — that is, what your annual pay would be if you worked the standard full-time hours for your role — multiplied by your part-time fraction. So a nurse working 0.6 WTE (three days out of five) on a full-time equivalent salary of £40,000 would have pensionable pay of £24,000 for that period.

The error that commonly occurs is not in the fraction itself — members are usually aware of whether they work part-time — but in the WTE salary figure used as the baseline. Where an employer submits an incorrect WTE salary to the scheme administrator, the pensionable pay calculation is wrong from the outset, regardless of whether the fraction is recorded correctly.

This matters particularly in the NHS pension's 1995 section, where final pensionable pay (broadly, your best year's WTE equivalent salary in the last three years, or a ten-year average if higher) is central to the benefit calculation. An error in WTE salary in those final years has a directly proportional impact on the pension payable for a member's entire career.

3. How Errors Enter the Record

Understanding where errors originate helps you know where to look. The most common routes are:

4. Term-Time-Only and Variable-Hours Contracts

Teaching assistants, school support staff, and others employed on term-time-only contracts face a specific complexity that is frequently mishandled. A term-time-only employee works fewer weeks per year than a full-year employee, and their annual salary is calculated accordingly. The question of what constitutes "pensionable pay" for the purposes of their defined benefit scheme has been the subject of dispute and, in some cases, litigation.

The issue centres on whether pensionable pay should be calculated as if the employee worked full-year (with a fraction applied for term-time hours), or whether it should simply reflect the actual salary paid over the year. The answer depends on the scheme rules applicable at the time, and on the employer's own payroll practice. Where an employer used a method inconsistent with the scheme rules — even unintentionally — members can end up with pensionable pay that is either too high or too low.

For LGPS members employed by schools and local authorities, this is an area that has generated a significant number of complaints and, in some cases, back-payments. Members with any term-time-only periods in their service history should look carefully at how their employer described their contract to the scheme and what pensionable pay figure was used in each year.

5. Career Breaks and Periods of Absence

Career breaks — whether agreed with the employer, or periods of long-term sick leave, maternity leave, adoption leave, or unpaid parental leave — affect pension accrual and must be recorded accurately. The treatment of each type of absence differs between schemes and between the legacy and 2015 scheme rules, and errors in classification can have material consequences.

For example, an NHS member on statutory maternity pay (SMP) continues to accrue pension based on their notional full pensionable pay during the period of SMP, not on the lower SMP amount actually received. If the employer submitted pensionable pay figures based on actual payments received rather than the notional full pay, the accrual for that period will be understated.

Agreed career breaks, where pension contributions ceased entirely, must be reflected in the service record as a gap rather than as zero-pay employment. Where the record shows a continuous employment with unusually low pensionable pay — rather than a clean break — the calculation of qualifying service length may be affected.

6. Who Is Most at Risk?

While any member with a complex service history is potentially at risk, certain groups are particularly likely to have errors in their records:

7. Warning Signs in Your Service History

When you receive your service extract from the scheme, there are specific things worth looking for:

Any of these may be innocent data-presentation quirks — some schemes display records in ways that can appear unusual without being erroneous. But each is also a genuine warning sign that warrants further investigation before your pension is calculated.

8. What to Do If You Suspect an Error

If your service history raises questions, the first step is to gather the underlying evidence: payslips, P60 documents, contract letters, and any correspondence confirming changes to your hours. Compare these against the scheme record period by period.

If you identify a discrepancy, write to the scheme administrator with your evidence. Be specific: state the period in question, what the scheme record shows, and what your evidence indicates it should show. Keep copies of all correspondence.

If your case is complex — particularly if it involves multiple employers, many years of part-time service, or a mixture of legacy and 2015 scheme service — a structured, independent review can help you prepare a clear and complete submission to the scheme and understand what the corrected figures should look like. That is precisely what PensionTech's service record audit is designed to provide.