We’ve received and been reviewing queries relating to contractual enrolment and pre-existing opt-outs.

Contractual enrolment and pre-existing opt-outs

The query related to when to enrol a member in accordance with the Teachers’ Pensions Scheme provisions if the member opted-out before 1 October 2012 for all employment. 

When a person made an opt-out election before 1 October 2012, they did so with the intention of opting-out for all employment (there was no other option at that time).

With the introduction of Auto Enrolment, the opt-out provisions were amended so that an opt-out is per employment.  An opt-out is now only applicable to the contract or contracts of employment that a person chooses to opt-out of when making the election(s).  The Department for Education has confirmed that there is no provision that links an opt-out made before 2012 to future contracts, although the opt-out remains valid for all contracts that began pre-2012.  The Department has therefore confirmed that, with effect from 1 December 2015, any person entering a new contract of employment must be contractually enrolled if they are eligible to be a member of the Scheme, regardless of any previous opt-out.

Given the complexity of the regulations and the likely intentions of members, the Department for Education has also confirmed that they do not intend to revisit past cases where members may have remained opted-out since 1 October 2012, despite having a new contract of employment.  There is 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.

The requirement to contractually enrol teachers in accordance with Scheme provisions does not negate the employer’s duty with regard to Auto-Enrolment.

System issue relating to the coding of service following an opt-out

Our bulletin in June advised that a problem had been identified for some members who started a new contract of employment after October 2012, but who had in place a pre October 2012 opt-out, or an opt out after October 2012 for all employment with that employer.  If contributions have been paid by, and on behalf of, such members, unless Teachers’ Pensions had received an opt-in or auto-enrolment template, this subsequent service will continue to be coded as opted–out on our systems. 

The bulletin explained that a temporary solution to this problem is to complete an opt-in form when contractually enrolling a person who has previously opted-out for all employment or, all employment with the authority that is giving a new contract of employment.  In cases where an employer confirms that a teacher has previously been contractually enrolled but service is coded as opted-out, a retrospective opt-in and evidence that contributions have been paid will correct the situation.  A number of employers have already arranged this