New employees must be contractually enrolled in the Teachers’ Pension Scheme, but if they choose they can elect to opt out of the Scheme by completing a form on the secure member section of the website, My Pension Online (MPO). The opt out will become applicable from the date that you as an employer receive the opt out form. Once you have received the opt out you shouldn’t take any pension contributions from their salary from the applicable date forwards. The member will also receive confirmation from Teachers’ Pensions as to the date from which their opt out applies.

Effective dates for opt out elections cannot be retrospective unless a member opts out within the first three months of joining the Scheme, in which case the opt-out will be treated as having immediate effect from the date of joining the Scheme and no contributions whatsoever are due and, if any have been deducted in the 3 month period they are to be refunded to the member.

If the opt out is made after the initial 3 month period, it is effective from the first of the month following the month in which it was received by the employer. For example, if the opt out is received by the employer in April, it will apply from May. No refund of contributions is paid unless the member hasn’t qualified for benefits, in which case they can apply for a repayment of contributions. Any failure to deduct contributions will generate an interest charge for both you and the member. Members with more than 3 months service, but who have not qualified for benefits, have the option of transferring-out their “pension” to another pension scheme, rather than taking a repayment of contributions plus interest.

Auto Enrolment requires you to re-enrol any employees who have opted out of the Scheme on the 3rd anniversary of your ‘Staging Date’ unless transitional delay applies or they opted-out within 12 months of the Auto Enrolment “anniversary date”. You must ensure that your payroll team/provider informs us when you auto enrol an existing member who is not in the Scheme, by using the Auto Enrolment template available on the Employer Portal.

Re-joining the Scheme

An employee who previously opted out can elect to re-join. You should direct them here to complete an application form. As part of the application process, you will have to provide confirmation of their employment.

The employee will receive an acceptance letter asking them to ensure their employer is aware of the election that they have joined the Scheme. You should deduct contributions from the date included on the acceptance letter.