We regularly receive queries regarding Contractual Enrolment, Auto Enrolment and Auto Re-enrolment.  The key topics relate to:-

• Contractual Enrolment when the member has previously opted out

• Contractual Enrolment on commencement of a new contract of employment, when the member has previously opted out

• When should an employer issue a new contract of employment

Here’s a reminder and update on the policy and process for these. 

Contractual enrolment when the member has previously opted out

Where Teachers’ Pensions have recorded an opt out for all employment, any subsequent service continues to be recorded as opted out, unless an Opt In form or Enrolment template is received, which makes it pensionable.

Similarly an opt out for all employment with an employer, will result in subsequent service with that employer continuing to be recorded as opted out, unless an opt in form or auto enrolment template is received (which again makes it pensionable).

The employer may have contractually enrolled the member into Teachers’ Pensions by completing a TR6 and deducting contributions. However where there’s a previous opt out the service may incorrectly continue to be recorded as opted out. This is because we have not received a notification, which will change the pensionable status on the record.

We advised employers in a bulletin in June 2015 that the immediate solution is to ask the member to complete an Opt In form when you contractually enrol them.  For any cases since 1 October 2012, where the service may be recorded incorrectly, we’ll accept a retrospective opt in along with proof that contributions were deducted.

The Auto Enrolment template has been adapted to be an Enrolment Template, suitable for Contractual, Auto Enrolment and Auto Re-enrolment.  Therefore it’s no longer necessary for an employer to arrange an opt in back into the Scheme, when contractually enrolling a person who has previously opted out.

Contractual enrolment on commencement of a new contract of employment, when the member has previously opted out

In December 2015, we had clarification that a previous opt out no longer applies upon commencement of a new contract of employment, regardless of when the opt out was made. Therefore, with effect from 1 December 2015, an employer should contractually enrol a person upon commencement of a new contract of employment. 

Some employers have been doing this since 1 October 2012 but others may have continued to treat the member as opted out.  There’s no intention of revisiting cases where a member has remained opted out since 1 October 2012, despite having a new contract of employment.  There’s provision in the regulations for a member to opt in at any time, in respect of each contract of employment and had a teacher wanted to change their pensionable status, it was open to them to do so.

If the Department decided that we did need to revisit such cases, this would result in arrears of contributions plus interest for both members and employers.  We confirm that in accordance with the news bulletin this is not the intention.

To summarise the position:

• Prior to 1.10.2012, a person was either opted out for all employment or opted in for all employment.
• 1.10.2012 to 30.11.2015, an employer may have continued to treat a person as opted out for all employment or they may have contractually enrolled them upon commencement of a new contract of employment.  They may also have Auto Enrolled them.  Note: a notification of Contractual Enrolment would have been required to make the service pensionable, i.e. an opt in.  An Auto Enrolment template should only have been completed for Auto Enrolment.
• 1.12.2015 onwards, a previous opt out can only apply to the post(s) the person was in when they made the opt out.  A new contract of employment should result in Contractual Enrolment.  The employer may also have an Auto Enrolment duty.  Note: a notification of Contractual Enrolment would have been required to make the service pensionable, i.e. an opt in. An Auto Enrolment template should only have been completed for Auto Enrolment.

The Auto Enrolment template has been adapted to be an Enrolment template suitable for  Contractual, Auto Enrolment and Auto Re-enrolment, therefore it is no longer necessary for an employer to arrange an opt in when contractually enrolling a person who has previously opted out back into the Scheme.

When should an employer issue a new contract of employment?

We’re receiving enquiries from employers about when they should issue a new contract of employment.  This is an employment matter to be agreed between the employer and the employee that we cannot advise on.  Further guidance may be available from employer associations.