Process opt-out/leave requests in the Pensions Module

When an employee in your pension scheme decides to leave the scheme, this is known as an opt-out or leave request depending on when the request is made.

It's really easy to process these requests in the Pensions Module, watch the video or follow the steps below to find out how you can do this.

NOTE: If you need to process an opt in/join request, you can follow the steps in this handy guide. 

When can an employee opt-out?

An employee who becomes an active member of a pension scheme under automatic enrolment can only opt-out and receive a refund during the opt-out period.

The opt-out period is one month from either:

• The date that you send a job holders letter to the employee
• The date that active membership is achieved, whichever is the latest date

If an employee leaves the pension scheme after the opt-out period, this becomes a leave request where a refund is not normally due.

TIP: If you aren't certain if your employee is due a refund, contact your pension provider.

Process the opt-out

TIP: When an employee opts out you mustn't manually add a left scheme date in the employee's record, as this stops the Pension Assessment from opting your employee out.

1. Click Payroll, then click Pension Assessment.
2. Select the employee you want to opt-out using the check boxes on the left.
3. Click Opt-out/leave.
    NOTE: If the opt-out button isn't available, check you've selected the correct employee only in the pension assessment, and that you haven't manually entered a left scheme date in their employee record. 
4. Complete the following details, click on each below for more information:
• Extension period used? >

  If the opt out request isn't correct, you can extend the opt out period for up to six weeks to allow the employee time to complete the form correctly. To do this, select this check box.

• Refund the first month's contribution of >

  Only available if the employee has opted out within the opt out period. Only the employee refund will show when processing the opt out. The total value of the employee and employer refund shows in the main assessment screen and the payslip shows the correct split amount.

• Refund paid directly by provider >

  If the employee is entitled to a refund which will be processed outside of Sage 50 Payroll by the pension provider, select this check box.

• Attach >

  To attach the opt out notice, click the paperclip the browse to the opt out file then click Open.

5. Click Opt-out then click OK.
   TIP: If your pension provider has agreed to refund the employee when they've left the scheme outside of the opt-out period, you can process this refund manually through enter payments. How to manually process a refund through enter payments >

Depending on the request received date, the Status column in the Pension Assessment shows Opted Out or Cessation and no further contributions will be deducted. 

NOTE: The Sage 50 Payroll Pensions Module doesn't currently refund a salary sacrifice pension automatically.

You've now processed the request, and the Pensions Module will use this opt-out data to ensure Cyclical Re-enrolment is completed correctly when this is due. What is pension re-enrolment? >

You can check the opt-out date in the employee record:

1. Double-click the relevant employee then click Pensions.
2. Click Manage Schemes, select the scheme then click Edit.
3. Check the Left Scheme date.

Refund first month option unavailable

In some cases, the checkbox beside 'Refund first month's contribution of' may be unavailable. A common cause for this is if the employee is opting-out but they're no longer within their opt-out period.

If this occurs, check you've entered the correct Request received date in the Opt-out window. 

If the date is correct and the option is still unavailable you can process the refund another way. If you're not already certain, you should check with the pension provider that the employee is due a refund before you process it.

If you're ready to process this, process the opt-out in the Pension Assessment then process the refund in Enter Payments. How to manually process a pension refund through enter payments >

Employee enrolled after opt-out

If you have already opted an employee out in an earlier pay period and the software is re-enrolling them later you may not have processed the opt-out request correctly. 

First check that it is not time for cyclical re-enrolment. You can do this by:

1. Click Company.
2. Click Pension Module Settings.
3. Click Manage Cyclical Re-enrolment settings.
4. Check your Cyclical re-enrolment date.

If you aren't within your cyclical re-enrolment window, you will need to rollback the employee to the period that they opted out then process the opt-out correctly. Then re-process the employee back up to date. Follow our guide to correct a previous payroll run.