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Opting out of a workplace pension

3rd Aug 2016

Employees who’ve been automatically enrolled or have opted into your workplace pension scheme have the right to opt out.

The decision to opt out must be freely taken by employees – ie you cannot ask them to opt out.

When a job holder can opt out

Once staff have been enrolled into your pension scheme they have on calendar month to opt out and get a full refund of contributions. The opt out period starts from whichever is later:

The date membership of the scheme became active
The date they received a letter from their employer with the enrolment information
If employees decide to leave the scheme outside of this period they will be ‘ceasing active membership’ and they may not get a refund (this will depend on the pension provider rules).

The opt-out notice

If an employee wants to opt out they’ll have to get an opt-out notice from the pension scheme provider, or fill out an online form.  This is to avoid any employer involvement in the decision to opt out.


If a member of staff opts out you will have to give them a refund of any contributions that have been paid into the pension scheme as long as they opt out within a calendar month.

What happens next?

If an employee changes their mind then they may be able to opt back in but you’ll need to check with your pension provider.

Opted out employees will normally be put back into the scheme at re-enrolment which happens three years after your scheme was set up.

The Pensions Regulator Detailed Guidance

Want some help with your workplace pension?
Biznus Payroll can help you with your pension choices, pension set up and ongoing management.
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01373 228300