Opt out of auto enrollment

Squint · 12 March 2014 at 2:23PM

I have a stakeholder pension which I pay into via my employer. I am the only employee in this particular scheme. Everyone else is in a different scheme.

With auto enrollment all employees including me will be auto enrolled into the main scheme.

I am thinking of opting out asap after being auto enrolled and asking my employer to continue paying into my existing stakeholder pension. My employer does not think they can do this I.e. they think they have to be in an auto enrollment scheme or not in anything at all.

Do you know if this is correct?

I appreciate there may be some hassle factor for them given that I am the only one but they say that is not the issue I.e. they will do that but they are not allowed. They are taking their advice from the auto enrollment provider so I am not sure they are getting the right information. They are not giving me details and I do not want to annoy my employer by pressing them too much.

I want to stick with my stakeholder as the provider charges significantly less than the auto enrollment provider.

mania112 · 12 March 2014 at 2:29PM

Nope.

Of course an employer can pay into any pension they want. They could pay into mine if they wanted to.

You don't have to wait to be enrolled to opt-out, in fact I don't think that's how it should work. You will opt out before anything is set up.

mania112 · 12 March 2014 at 2:32PM

p.s - i'm not entirely sure a company can pay into a pension of a non-employee, but you get the point!

Squint · 12 March 2014 at 9:36PM

Thanks I have been told I cannot opt out in advance but can after the first payment is made I think but I am not sure I get the money back. I can cope with that (if I must) but do not want to swap stakeholder charges with much higher ones under their main scheme!

Old_Slaphead · 12 March 2014 at 9:58PM

mania112 wrote: »

You don't have to wait to be enrolled to opt-out, in fact I don't think that's how it should work. You will opt out before anything is set up.

No you can't.

If you're an 'eligible' employee you have to be enrolled into a scheme. You can opt out within 30 days and have a refund.
Thereafter you can cease to be a member but any contributions made cannot be refunded and they remain as your contributions within that scheme.

Whatdoiknow · 26 March 2014 at 10:39AM

Old Slaphead is correct and mania112 not unfortunately.

An employee cannot opt out until after they have been informed by their employer that they have been enrolled.

Secondly with regard to AE an employer cannot just decide to not enroll someone and pay into another scheme. Any other scheme has to be AE compliant.

However, if an employee is enrolled, then opts out I don't suppose that would prevent an employer paying into another scheme if they so decided.

atush · 29 March 2014 at 11:29AM

So find out if your current scheme is AE complaint from your provider. If it is, have them provide this info in writing plus any forms for your employer to fill in for their contribs.

If your employer refuses to do this even after you have gotten the information, then I would not opt out. Higher charges will not be a reason to forgo the Free Money.

Put in enough to get the max employers contrib, then pay any more you want to save into your own pension as before.

SevenOfNine · 30 March 2014 at 12:58AM

If you do 'opt out', you will have to do so every 3 years, because at that point you'll be auto enrolled again! Unless the current rules change in the meantime.

Squint · 13 April 2014 at 4:46PM

Thanks my current scheme is AE compliant. However my employer's main provider who is advising them about AE has told them they need some sort of extra certification if they want to use my existing scheme as an additional AE scheme. They will charge my employer over £1k for giving that certificate.

My employer is hugely sympathetic but understandably neither they nor I are willing to pay that. My employer is going to go back to them and ask if I can be AEd into their scheme, opt out and opt out again every 3 years and keep my current scheme.

I just wish it were easier for both me and my employer to check the position out. I was also warned that I might not be able to do this because my employer might be seen to be trying to induce me into opting out. It is frustrating as they are good employers and are definitely not trying to do that!

ableandy · 17 May 2014 at 9:06PM

Your employer does not have to pay for certification of the current scheme. As long as the scheme meets the requirements of AE then your employer certifies it as such every 18 months.

Fajita_2 · 27 June 2014 at 9:22PM

mania112 wrote: »

You don't have to wait to be enrolled to opt-out, in fact I don't think that's how it should work. You will opt out before anything is set up.

This is incorrect. You do have to wait until you are enrolled in order to opt out. Each AE worker will get 30 days to do this following enrolment. They won't be able to do so beforehand as the employers have a legal obligation to enroll all eligible workers so that they meet their legal duties in line with the Pension Act 2008, as otherwise the pension provider and The Pensions Regulator (TPR) would have no idea whether there was any intention to enrol the worker. Also, you won't be present on the Pension Providers' systems prior to enrolment so it will physically be impossible. They only create an account for you once you are enrolled.

Opt out of auto enrollment

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