What about those who opt out?
A member may decide that they wish to opt-out of the pension scheme even though they continue to be employed at the company.
This decision should not be taken lightly as the member is giving up valuable benefits and protection for their family. Some people simply find that they can’t afford the contributions but others are wary of pensions and the financial industry in general and simply want to walk away.
Leaving the Scheme – continuing in employment
Introduction
A member may decide that they wish to leave the pension scheme even though they continue to be employed at the company.
This decision should not be taken lightly as the member is giving up valuable benefits and protection for their family. Some people simply find that they can’t afford the contributions but others are wary of pensions and the financial industry in general and simply want to walk away.
Leaving the scheme – continuing in employment
For a member wishing to leave a non-automatic enrolment scheme the options available are normally the same as for people who are leaving the company.
The member may only be allowed to rejoin the scheme at the trustees’ discretion.
They will, however, still be covered by the automatic enrolment requirements and automatically enrolled into their employer’s automatic enrolment scheme as appropriate.
Automatic Enrolment
You will remember from the module "Joining an Occupational Pension Scheme” that every employer has a legal duty to help workers save for retirement and certain workers will be automatically enrolled if they meet the eligibility conditions.
Opt-out period
Specific rules apply for opting-out of an Automatic Enrolment scheme. Members may choose to leave whenever they want. However, there are specific opt-out provisions that apply for a limited period after the member has been automatically enrolled.
For Occupational Pension Schemes the opt-out period is one month from the later of:
Refund of Contributions
The member will be refunded with any contributions paid once they have opted out of the Automatic Enrolment scheme and their record will be unravelled to put them in the same position as if they had never joined the scheme in the first place.
A member may not be able to get their contributions refunded if they decide to leave the scheme at a later date.
Re-enrolment
Unlike other schemes, opting out is not the end of the matter for the member as the automatic enrolment process is repeated every three years. If they are still eligible they will be automatically enrolled to the scheme again at that time
