Through various communications with stakeholders we’ve had a series of queries which we thought we’d update you with:-

• 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
• 3 year re-enrolment rejections and messages generated by Teachers’ Pensions

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 auto 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.

This was always intended to be a temporary measure and we plan to adapt the enrolment template so that it can be used for contractual enrolment as well as auto enrolment.

It’s intended to record individual contributions through MDC and we’ll assess the opportunities available to us, which may mean that the requirement for certain forms falls away.

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

Recent policy clarification is 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 be required to make the service pensionable, ie an opt in, an auto enrolment template should only be 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 be required to make the service pensionable, ie an opt in, an auto enrolment template should only be completed for auto enrolment.

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.

Query on 3 year re-enrolment rejections with the message “ A number of cases were rejected with reason given of “Opted Out in previous 12 months (dd/mm/yyyy)”

With regard to these rejections, we can confirm that moving forward such re-enrolments will not be rejected and the validation code has been changed by our IT team.

We have identified 151 rejections as detailed above.  We have also identified the employers who have received these rejections and will be updating these member’s records to show that they have been auto enrolled and we’ll notify the employers concerned.

Query on other messages generated by Teachers’ Pensions to employers following submission of an auto enrolment template or a 3 year re-enrolment template

In relation to the above query, we intend to review the validation criteria, which is generating messages to employers following the submission of auto enrolment templates and analyse those previously generated.

We’ll continue to keep you up to date through our bulletin and employer news.