Although the rules around auto enrolment mean that you need to add all eligible employees to your workplace pension, they can choose to opt out if they’d rather not be a member.

When your employees can opt out

There’s a limited amount of time in which an employee can opt out of your workplace pension. This is known as the opt out window.

Once all eligible staff have been auto-enrolled, they have one calendar month to opt out of the workplace pension. Aviva will then return any contributions paid to you. The opt-out window will start from the date that active membership began. This happens on the later of the day on which you give the employee their enrolment information and when we give them the terms and conditions of the pension you have set up for them.

How to opt out

To opt out of the workplace pension, your employees must complete and return an opt out notice. The opt out notice is a safeguard to ensure that it’s an employee’s decision to opt out, rather than the employers.

If you have an Aviva workplace pension, your employees will receive information on how to opt out in the welcome pack we'll send them. There’s also the option of calling our dedicated opt out line on 0800 056 3192. Our lines are open Monday to Friday 8:00am – 6.00pm. Our opening hours may be different depending on which team you need to speak to.

If you’re not using Aviva’s Company Pension, your employee will need to obtain an opt-out form from your pension provider. When an employee submits an opt out notice you’ll need to check that it’s valid. Along with the date when the form was completed and the name of their employer, a valid opt out notice includes the employees:

  • Full name
  • National Insurance number or date of birth
  • Signature

The opt out notice must also contain the following statements, which give your employees more information about opting out and their rights as an employee:

  • ‘Your employer cannot ask you or force you to opt out.’
  • ‘If you are asked or forced to opt out, you can tell The Pensions Regulator.’
  • ‘If you change your mind, you may be able to opt back in – write to your employer if you want to do this.’
  • ‘If you stay opted out of the scheme, your employer will normally put you back into pension saving in around three years.’
  • ‘If you change your job, your new employer will normally put you back into pension saving straight away.’
  • ‘If you have another job, your other employer might also put you into pension saving, now or in the future. The notice only allows you to opt out of pension saving with the employer you name in the notice. A separate notice must be filled out and given to any other employer you work for, if you wish to opt out of that employers pension saving as well.’

The following declaration must be included before the employee’s signature:

  • ‘I wish to opt out of the pension scheme’
  • ‘I understand that if I opt out, I will lose the right to pension contributions from my employer’
  • ‘I understand that if I opt out, I may have a lower income when I retire’

What to do once you’ve received an opt-out notice

Once a valid opt-out notice has been received, you should immediately stop taking contributions from the employees salary, and refund any deductions that have been taken. There’ll be no need to assess the employees earnings again until your re-enrolment date.

If an employee opts out the first time they’re auto-enrolled, this effectively means they’ve never been a member of your workplace pension. Aviva will tell you when an employee opts out, so you can stop contributions. Aviva will return any contributions we have received to you.

Keeping records

As an employer, you’re required to keep either the original or a copy of the opt-out notice for four years, either electronically or on paper. Scheme administrators also need to keep the following information.

For four years:

  • The names of any employees that have opted out of the pension scheme
  • The date that the employer notified the pension scheme that the employee had opted out

For six years:

  • The date on which active membership of the pension scheme was ceased by the employee

What your employees should consider before opting out

Before any of your employees decide whether they want to opt out, there are a couple of important points to consider.

  • Pension contributions that they make currently receive tax relief from the Government, and can provide a tax-efficient way to save. Tax benefits are subject to change and will depend on the employees' individual circumstances.
  • By opting out of the workplace pension, they’ll no longer be entitled to receive employer pension contributions.

How your employees can opt back into the workplace pension

Employees who meet the criteria to be auto-enrolled into your workplace pension can opt back in at any time. To do so, they need to submit an opt in notice, which is only valid if:

  • It is in writing (this includes email)
  • It is signed by the employee that wrote it. If it’s sent by email, it must include a statement from the employee confirming that they personally submitted it

Once the opt-in notice is received, you must identify the date that you received it and assess the employee. You should then enrol them into your workplace pension offering within six weeks of receiving the notice, and pay contributions yourself (as an employer) if they’re a jobholder at the time of submitting the opt-in notice.

You can refuse the opt-in application if the employee opted out or stopped contributions within the last twelve months.

The value of an investment can go down as well as up and the employee could get back less than invested.