Processing an opt out request
An employee who becomes an active member of a pension scheme under automatic enrolment can only opt out during the opt out period. The opt out period is one month from the date that you send a job holders letter to the employee, or the date that active membership is achieved, whichever is the latest date. Payroll will determine the type of worker the employee is, as well as their opt out period.
For more information, please view the detailed guidance from TPR about opting out.
Your pension provider sends information to your employees about opting out. The exact process depends on your provider and you should confirm this with them.
- Jobholders who choose to opt out of a qualifying scheme within the opt out period are entitled to a refund of any contributions already made.
- Entitled workers who join a scheme, and then choose to leave, are only entitled to a refund if the pension scheme rules allow. Payroll doesn’t generate a refund for these workers, instead the refund comes directly from the pension provider.
To process an opt out in Payroll, follow the below steps;
- Process the pay run as normal until the Edit Pay stage.
- Select on the relevant employee.
- Select Manage Enrolment.
- Select Opt Out/Leave, then enter the following information:
| Request received | Enter the date you received the opt out request from your employee. |
| Extension period used? | If the opt out notice is not completed correctly, the opt out period can be extended to six weeks to allow the employee to provide a correct form. To extend the opt out period, select this check box. |
| Refund contributions of £xx.xx | This is only available where a refund applies and the opt out is valid. If you’re unsure, check with your pension provider. If the employee is entitled to a refund and you want to pay the refund to the employee via Payroll, select this option. The refund is automatically applied to the employees pay. |
| Refund paid directly by provider | This is only available where a refund applies and the opt out is valid. If the employee is entitled to a refund and it’s paid directly by your pension provider, select this option. If you’re unsure, check with your pension provider. |
- Select Opt out.
If you enter an opt out date that is before pay runs you have already completed, you may see a correction showing on your next available pay run.
For more information, view the corrections frequently asked questions page.