Not every employee will want to be in Auto Enrolment, for example they may have their own pension arrangements.

But be very careful that you don’t induce or encourage them to opt out.

Most employees will want to be IN

Once staff have been enrolled into the pension scheme, they have one calendar month during which they can opt out and get a full refund of any contributions. This is known as the ‘opt-out period’. It starts from the whichever date is the later of:

• the date active membership was achieved, or
• the date they received your letter with the enrolment information.

Staff can’t opt out before the opt-out period starts or after it ends. If they decide to leave the scheme outside this period, they will instead be ‘ceasing active membership’. Whether they get a refund of contributions will depend on the pension scheme rules.

Staff opt out by giving you an ‘opt-out notice’. The opt-out notice is provided by the pension scheme. This is to avoid any employer involvement in the decision to opt out, which could lead to a breach of the law.

If an employer does anything to encourage or induce an employee or potential employee (at interview) to opt out they will be subject to harsh penalties.

If an employee does Opt Out they will be re-enrolled every 3 years.

steve@bicknells.net