Auto enrolment and opt out

jamesd

SW17 wrote: »

Assuming one of those tiny number of cases would be someone applying for, or having, fixed or individual protection of their lifetime allowance, would the unwanted first payment from auto-enrolment automatically invalidate the protection? How would someone prevent this from happening if they can't opt out before payments start?

They can tell their employer not to automatically enrol them because they have lifetime allowance protection. This is one of the exceptions to the auto-enrolment rules that allows an employer to not enrol:

"With effect from 1 April 2015, The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations (S.I. 2010/772) have been amended so that, where the employer has reasonable grounds to believe that a jobholder has enhanced protection, fixed protection or fixed protection 2014 (with the onus on the jobholder to tell them so), they are no longer required to automatically enrol or re-enrol that jobholder, meaning that there will not be a need for the jobholder to opt out. It will be a matter for the employer to decide whether or not to exercise the discretion not to auto-enrol or re-enrol the jobholder and to decide what is reasonable grounds to believe the jobholder has enhanced protection, fixed protection or fixed protection 2014. A copy of the HMRC certificate is one such way to demonstrate reasonable grounds."

That page is linked to as the relevant one for for example FP2014 even though it's formally not about that.

The HMRC online service status can be printed out to use as evidence instead of a HMRC certificate.

An employer can't be forced not to enrol and if they do it anyway then opting out is required.

Alan_Anderton

Hi, thanks for the info so far. I've just started a new job as the first (and only) employee with a small charity. I am 64 and will be eligible for my state pension in September. Will it still be in my best interests to pay in to a pension scheme they will need to set up, or opt out and make my own arrangements ? Will they have to pay into the scheme as well, if I am the only employee .

dunstonh

Will it still be in my best interests to pay in to a pension scheme

yes. Free money is still free money.

or opt out and make my own arrangements

no free money with that option.

Will they have to pay into the scheme as well, if I am the only employee .

They are required to pay into their arranged auto-enrolment scheme but are not required to pay into an individual arrangement put in place by you.

MerlinMags

I didn't realise that employers HAD to make contributions to the new style pensions. I was confused by talk of "free money" above, until I spotted the MSE guide which says "Auto-enrolment is like a pay rise":
http://www.moneysavingexpert.com/savings/auto-enrolment

Paul_Herring

MerlinMags wrote: »

until I spotted the MSE guide which says "Auto-enrolment is like a pay rise":
http://www.moneysavingexpert.com/savings/auto-enrolment

Realistically, what most businesses do is reduce pay rises to pay for the money they have to put into pensions.

greenglide

reduce pay rises to pay for the money they have to put into pensions.

But not if workers are only on minimum wage which many will be.

AbbieCadabra

just for info in case anyone is looking in future, we set up our scheme with NEST & during the opt-out period, you take the pension contribution from wages but don't actually pay it to NEST. all our employees opted out & i 'refunded' any contributions taken in their next weeks wages after opt out showing as confirmed on NEST.

it's been a bit of a faff & NEST aren't the easiest to deal with for any queries, but all done now & just have to review again in 3 years time. their website leaves a lot to be desired for ease of use, but i would have been happy to use if employees had remained in the scheme.

chrisedwards

Yes employer should opt for auto-enrolment and employee can also compare plans from other services providers.