By Steve Blissett
Opt-in/ Put in /Opt-out – What is it all about?
Pension auto-enrolment is the most complicated pension legislation that affects every employer in the UK. Introducing new terminology, confusing not only pension advisors and employers, but leaving many employees perplexed too. In this short article, we explain “Opt-in”, “Put in” and “Opt-out”.
Opt-in – an employee can join the pension scheme, before being put in – typically, when an employer is using postponement, an employee can ask the employer to “opt them” into the pension before they are put in.
Put-in – all eligible jobholders must be auto-enrolled into the scheme, whether they want to join or not.
Opt-out – once the employee has been put in, they can then opt out (leave the scheme).
Opt-in – all employees who were not put in (auto-enrolled) can elect to opt-in (including any employee who opted out)
As always with auto-enrolment, very little is to do with pensions – it’s all to do with processes and procedures. These depend on who is undertaking the administration – the employer, the payroll, the administrator or the pension provider. Each has a role to play.
If an employee opts out within one month of joining the scheme, then they and the employer will get a refund for any contributions paid. However, if they opt-out after one month no refunds are allowed.
All employees should receive a letter saying they have been put in or telling them they can opt-in. These letters will be issued by either the employer, administrator, payroll or pension provider. Usually, once joined, the pension provider will issue a joining pack with details of how to opt out.
To help us keep your employees AE details up to date, please make sure you send us staff details when they change, eg address, email address, etc….
The Rodliffe & Salvus solution
For our employers who are using Salvus as the pension provider, all letters are produced automatically when the employee data is uploaded to the pension portal. Once the letters have been issued, employees wanting to opt-in can inform their employer (the letter issued will tell them how, and who to address this to).
Employees who wish to opt out will also be told how to do this either online or by sending a letter to the employer. An employer receiving an opt-out notice must inform payroll ASAP.
Using this solution, Rodliffe will process all of this for you.
3 years time
3 years from staging, now known as your duty start date, you do the Hokey Cokey all over again. Everyone who opted out must be put in, and they can then opt out, then opt in… I don’t know about you, but this makes my head hurt…
Auto-enrolment is not simple. So far nearly 40,000 employers have been fined and over 100,000 compliance notices issued. We are eagerly awaiting the next quarterly compliance update. The link below takes you to the bulletin issued in January 2018.
This link names and shames employers who are not compliant. Scroll down a bit to see the names.