Process opt-out/leave requests in the Pensions Module

How to process an opt-out/leave request in Sage 50 Payroll.

When an employee leaves your pension scheme, it's called either an opt-out or leave request depending on when they make the request.

Find out below how to process this using the Pensions Module.

When can an employee opt-out?

An employee 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 isn't normally due.

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

---

Process the opt-out

When an employee opts out, don't add a left scheme date in their employee's record. If you do, 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 this button isn't available, check you selected the right employee, and that you didn't enter a left scheme date in their record.  
4. Complete the following details, select each option 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. This is to allow the employee time to complete the form correctly. To do this, select this check box.

• ▼ Refund the first month's contribution of

  This option is only available if the employee opted out within the opt-out period. 

  Only the employee refund appears when you process the opt-out.

  The total value of the employee and employer refund shows in the main assessment screen. The payslip shows the correct split amount as a negative value.

• ▼ Refund paid directly by provider

  If the pension provider sent the refund directly to the employee, select this check box.

• ▼ Attach

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

5. Click Opt-out then click OK.
   TIP: If your pension provider agrees to pay the refund outside the opt-out period, process it manually in 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. The Pensions Module will use this opt-out data to complete Cyclical Re-enrolment when it's due. What is pension re-enrolment?

The refund appears as a negative value on the employee's payslip.

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

Sometimes, the checkbox beside 'Refund first month's contribution of' can 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 can 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 the software re-enrolls an employee after opting them out earlier, the opt-out request might not have been processed correctly.

First check that it isn't 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, 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 article to process a previous payroll with the Rollback option.

---