Some staff who aren’t eligible for automatic enrolment have a right to opt in to their employer’s pension scheme.
Staff who opt in are entitled to contribution into the pension scheme from their employer.
Other staff can ask to join a pension scheme but aren’t entitled to an employer contribution, though the employer can pay one if they want to.
Key points
- Opting in and joining are not the same.
- Staff opt in or join by writing to their employer.
- The pension scheme the employer uses for staff who opt in must be suitable for automatic enrolment.
- The employer doesn’t have to pay an employer contribution into the pensions of staff who join.
How staff opt in or join
As part of an employer’s automatic enrolment duties, they’ll have written to the staff who weren’t eligible for automatic enrolment telling them about their right to opt into, or join, a pension scheme.
Staff can decide to opt in or join at any point. They do this by writing to their employer.
Checking opt in or joining requests
All requests to opt in or join must be in writing and signed by the person asking to opt in or join. If they sent it to your client electronically, it must include a statement from them that they personally submitted the request.
It could be months or even years after your client first told staff about their right to opt in or join that they choose to do so. So your client will need to check their staff member is still entitled to opt in or join by checking their age and earnings. Business software (eg payroll) will help them do this.
Checking the right to opt in
Staff who can opt in are:
- aged 16-21, or state pension age to 74
- earning above £10,000 a year
or
- aged 16-74
- earning above £6,240 up to and including £10,000 a year
Staff who have previously asked to leave the scheme, either after being enrolled or opting in, can also opt in again. But if they’ve already asked to opt in during the last 12 months and subsequently asked to leave or ceased membership, it’s up to the employer to decide whether to enrol them. There’s no obligation to do so.
Checking the right to join
Staff who can join are:
- aged 16 to 74
- earning £6,240 or less per year
What your client must do
If the requests are signed and the staff member still has the right to opt in or join, your client must enrol them into a pension scheme. If the request isn’t signed, the staff member will need to resubmit it signed.
Staff opting in
Your client must enrol staff who have opted in to a pension scheme they are using for automatic enrolment. Your client must usually do this within a month of receiving the request. Once in the pension scheme, they are treated the same as staff who had to be enrolled which means your client must pay an employer contribution.
Staff joining
The pension scheme your client puts these staff into doesn’t have to be one they use for automatic enrolment and they don’t have to pay an employer contribution unless they want to, but the scheme should still be good quality. The scheme provider will tell your client the date when the staff member will go into the scheme.
Advanced guidance
This resource is aimed at professional advisers and employers with in-house pensions professionals.
- 6. Opting in, joining and contractual enrolment
How to process pension scheme membership outside of the automatic enrolment process.