If you are eligible for auto enrolment your employer must enrol you. However, you may decide that you wish to opt out of the scheme. This should be your decision and not your employer.
Key points
- To opt out you will need to complete and return an Opt out form.
- Any contributions already made to the scheme will be repaid in full if you opt out within one month of being enrolled.
- If you opt out after a month any contributions normally remain in your pension pot until you can draw retirement benefits.
- Employers are required to re-enrol eligible jobholders into the workplace pension scheme normally every three years. Of course you could then decide to opt out again.
If you are an eligible jobholder and you don’t want to join your employer’s workplace pension scheme you can opt out, but only once you have been enrolled.
If this is within a month of being enrolled if will be like you never joined the scheme and any contributions will be refunded in full.
If this is after a month then any pension contributions will usually remain in your pension pot. You cannot normally draw pension benefits until you are aged 55 or over.
To opt out you will need to complete an opt-out form. You should ask the pension provider for this and your employer will be able to give you the contact details. Once completed you must return it to your employer (or the address given on the form). Some pension providers allow you to do this electronically.
This will then allow you to opt-out from the pension scheme for three years. After this your employer is required to automatically enrol you into the pension scheme again if you are eligible. At this time you can complete the opt-out form again if you wish.
If you opt out you may be missing out on valuable retirement benefits. These include the contributions made by your employer and the tax relief that the Government adds.