Decided to reduce your hours at your current employer? This will not only affect your salary – it will also have an impact on your pension. Below we explain how it works.
The amount of your pension depends on your pension contribution and the return on your investments. Your pension contribution is determined by three factors:
- Your graduated scale (> read more about graduated scale)
- Your pensionable salary
- The number of hours you work (your ‘part-time percentage’)
If you work 40 hours per week, your part-time percentage is 100%. If you decide to reduce your hours to 32 hours per week, for example, your part-time percentage will change to 80%.
Accruing less pension
The amount for your pension contribution is multiplied by your part-time percentage. If you decide to reduce your hours, your part-time percentage and your pension contribution will also go down. As a result, you will accrue less pension.