Clarification on opt outs

A number of you have asked for clarification regarding opt outs in relation to contractual enrolment and auto enrolment and in particular confusion about opting out for all employment where there is a single employer relationship.

Opt outs made on or after 1 October 2012, apply to the contracts the member is opting out of at that time.  If a member has made an opt out on or after 1 October 2012 any new contract of employment after the opt-out will result in contractual enrolment under the Teachers’ Pension Scheme regulations.

Following the introduction of the Scheme Arrangement report, it’s come to light that where Teachers’ Pensions have recorded an opt out for all employment, any subsequent service with that employer continues to be recorded as opted out unless an opt in form or auto enrolment template is received which makes it pensionable.

However, where employers have contractually enrolled members and deducted contributions, their service will continue to be recorded as opted out because no notification has been received to say that it should be pensionable.  The immediate solution to this 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 TP will accept a retrospective opt in along with proof that contributions were deducted.

When an employee takes up an offer of employment with an establishment, the employer must submit a form TR6 to notify Teachers’ Pensions of the appointment.  Where Teachers’ Pensions have been notified of an appointment following an opt out, we’ll be able to check whether those employees have been correctly enrolled into the Scheme.

Questions have also been asked about when non-pensionable employment that began before 1 January 2007 becomes pensionable.  Further information can be found here.

A timeline of the changes with regard to contractual enrolment, opt outs and Auto Enrolment can be found here. Information about our opt-out process can be accessed here.