Auto-enrolment—opting out
Auto-enrolment—opting out

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Auto-enrolment—opting out
  • Who can opt out?
  • Opt-out period
  • Ban on inducing opt-out
  • Opt-out notice
  • Steps following receipt of a valid opt-out notice
  • Refund of contributions
  • Record-keeping
  • After the opt-out period has expired

Jobholders have a statutory right to opt out of a scheme into which they have been enrolled by completing a valid opt-out notice and submitting it to their employer within a limited period. If a jobholder submits a valid opt-out notice, they are treated as if they had never been a member of the scheme.

The Pensions Regulator has issued guidance explaining the opt-out process, including who can opt out, the timescales involved and the process an employer must follow when they receive an opt-out notice.

Who can opt out?

The right to opt out is available to eligible and non-eligible jobholders. Eligible jobholders can choose to opt out after they have been enrolled (or re-enrolled) automatically into an automatic enrolment scheme. Non-eligible jobholders who have opted in to an automatic enrolment scheme can choose to opt out after they have been enrolled into the scheme.

An employer has no right to opt out on behalf of jobholders. An employer who impersonated temporary workers to opt them out illegally was prosecuted by the Pension Regulator and eventually received a significant fine and a custodial sentence.

Entitled workers who have asked to join a pension scheme, and workers who have been contractually enrolled into a scheme, do not have a right to opt out but can cease membership in accordance with the scheme rules.