How do staff ‘opt in’ or ‘join’?

Automatic enrolment means that every member of an organization’s workforce is assessed against their individual age and earnings. Those who meet specific criteria are deemed to qualify as ‘eligible jobholders’ and must be automatically enrolled into your qualifying workplace pension scheme (QWPS) – but what about those who don’t qualify?

Depending on their age and earnings, those members of an organization’s workforce who don’t qualify as being ‘eligible’ for auto enrolment, will be assessed as either ‘non-eligible’ or ‘entitled’ – the Pensions Act 2008 giving both a number of legal rights. They will either:

• qualify for automatic enrolment – as an ‘eligible jobholder’;
• have a right to ‘opt in’ – as a ‘non-eligible jobholder’;
• or, have a right to ‘join’ – as an ‘entitled worker’.

Although ‘opt in’ and ‘join’ may sound the same, it’s important to be aware that there are some significant differences.

• Opting in – ‘Non-eligible’ members of staff
  If the employee is assessed as being a ‘non-eligible jobholder’ they have the right to ‘opt in’ to your QWPS. It means they have the legal right to be included in the scheme under exactly the same terms and conditions as those who qualify as ’eligible jobholders’. That means, for example, that both they, and you, have to pay contributions into the scheme.
• Joining – ‘Entitled’ members of staff
  If they are assessed as being an ‘entitled worker’ they have the right to ‘join’ a pension scheme – but it doesn’t have to be your QWPS and, although they have to make contributions, you don’t have to. However, to ease administration, you may decide that, rather than set up a standalone scheme for one employee, you treat ‘entitled’ workers in the same way as those employees who either qualify for auto enrolment because they are ‘eligible’, or have the right to opt in because they are ‘non-eligible’.

Part of your employer’s duties means that you must write to every member of your workforce to advise them whether or not they qualify for automatic enrolment and, if they don’t, to advise them about their rights, which includes whether they can either opt in to either your QWPS or join a pension scheme. Having done so, they can then exercise their rights by asking to do so in writing.

It’s another example of the need to informally assess staff as doing so will give you an idea of what may (may!) confront you – and that means you can plan accordingly. In this instance, knowing you may have employees who may decide to either opt in to your QWPS or join a scheme means you can set up a policy to meet any request that may be made.

How can One Financial Solutions help you?

One Financial Solutions is here to help you. We can help you plan and implement everything necessary to ensure you comply with the new legislation and fulfil your legal obligations.

If you already have a workplace pension scheme we’ll review it to make sure it can be used and will recommend any changes that may be needed. If you need a new scheme we’ll find one for you and, as a truly independent firm of financial advisers, we’ll make sure the scheme we recommend is selected from the entire market and is the one that is best for both you and your staff.

More than that, if you’d like us to administer the entire scheme for you, we can do that too.

So, if you’re looking for specific help about auto enrolment or just want advice on the subject, please call us on 020 3714 9565 or ask us to call you by sending an email to admin@onefinancialsolutions.co.uk.