Flexible pensions, auto enrolment, pension withdrawal

Auto Enrolment – have you met your obligations?

A gentle reminder that all businesses should now be aware of, if not fully compliant, with Auto Enrolment legislation.

If you are an established business with existing staff, you should have passed your staging date, have selected your scheme and be making contributions – with your employees making payments up to the current minimum contribution level. The table below shows the current contribution levels and the planned increases due in April 2019, something you should also be aware of and be informing your employees of.

  Minimum Contribution %




April 6 2018 – April 5 2019




April 6 2019 onwards




If you are a sole trader or a new start up looking to employ staff in the future, then you should make yourself aware of the rules governing Auto Enrolment, as these will apply to you from the moment you employ your first member of staff. To find our more or to begin the process of registration, visit The Pensions Regulator website.

Opting Out of Auto Enrolment

As the name suggests, auto enrolment automatically opts employees and Directors in to a contributory pension scheme. However, it is possible to opt out. Within SMEs, the opt out is typically taken by the business owners /Directors because they already have alternative provision. You must not actively encourage staff to opt out of their workplace pension.

There are specific rules governing the right to opt out:

  • staff who have been automatically enrolled or who have opted in have the right to opt out
  • the decision to opt out of the workplace pension must be taken freely by the staff member
  • staff cannot opt out until after they’ve been automatically enrolled
  • the opt-out period is one month from when active membership is created, or they receive their letter with the enrolment information, whichever is latest
  • staff opt out by getting an opt-out notice from the pension scheme which they then complete and give to their employer
  • the employer must issue a full refund of any contributions the staff member has made into a pension scheme within a month of receiving a valid notice

If an employee decides to opt out, outside of the opt out period, then they will be deemed to be ceasing active membership which does not always offer the flexibility of opting out and may mean any contributions to date cannot be refunded. The rules for ceasing active membership will typically be set by the individual pension scheme.

If you need any advice or guidance with auto enrolment, please do not hesitate to contact us.