Company charging me for opting out of auto enrolement pension

jamesd

nicola261180 wrote: »

Just to confirm I am being charged £30 to opt out or £83 a month minimum to be in.

Those numbers make some sense given the requirement for an employee contribution to be opted in, as well as the company part. But there's still the question of why there is a deduction from pay for the employer part and why it is 1%, which is more than it takes to recover a 1% addition to pay.

nicola261180

Thanks
I am sending everything over to the pensions regulator and they will look into it for me

dunstonh

I am sending everything over to the pensions regulator and they will look into it for me

What does the employer say?

You should at least give them a chance to explain it before you involve the pension regulator and irritate your employer.

xylophone

Thanks
I am sending everything over to the pensions regulator and they will look into it for me

Would the PR not expect you to have sought an explanation from your employer first?

nicola261180

We have a central office which deal with HR aspects and I just keep getting a link to the intranet stating

Opting out - Why will I forfeit?
To comply with the new legislation and to support employees to save for their future, ***** has a contribution structure for all employees that encourages saving for retirement and minimises the number of opt outs.

Reducing the level of flexibility around pension funding ensures that ***** is compliant with the legislation, by preventing the company being perceived to ‘induce’ employees to opt out, therefore any employee opting out of the pension will forfeit the 1% employer contribution to pension on a monthly basis.

In none of my paperwork does it state I will pay to opt out which is what I am doing, when I was at my previous employer and opted out I was charged for not being in the pension scheme. The thing is no one is telling me where the money is going that I am being charged and I have waited 3 weeks or a response

dunstonh

Reducing the level of flexibility around pension funding ensures that ***** is compliant with the legislation, by preventing the company being perceived to ‘induce’ employees to opt out, therefore any employee opting out of the pension will forfeit the 1% employer contribution to pension on a monthly basis.

That isnt saying you are going to be charged. It just says you will forfeit the employer contribution. That is correct with opt outs.

This really sounds like a payslip issue. i.e. they may increase your pay to reflect the 1% and then reduce it to reflect you are opted out.

I would give them one more chance and state that you are going to the pension regulator. That may just prompt them into explaining it as I suspect that it is more likely down to a misunderstanding rather than a wrongdoing.

nicola261180

Ok will try and speak to someone tomorrow but on another page on the site it says the below

If you choose to opt out of the GSIPP, you will forfeit the minimum amount of employer pension funding (1% of Qualifying Earnings in 2013).

E.g.

If your qualifying earnings are £20,000pa, opting out would incur a cost of £12 a month.

If your qualifying earnings are £40,000pa, opting out would incur a cost of £29 a month.

So it looks like they are going to charge me

ozzage

Obviously you're not going to get the employer pension contribution if you opt out of the pension! Do you really think you should?

jamesd

The problem isn't not getting the employer contribution it's how and how much is being deducted. Even if 1% was added to pay for the payslip, deducting 1% from the result is taking too much to reverse the 1% addition: 1% of 101 is more than 1% of 100.

greenglide

And it is salary sacrifice as well, isn't it, judging by the flexible benefits package offered?

So the payslip layout can be confusing.