Ceasing contributions vs opting out of a workplace pension
Employees may decide that they no longer want to contribute to their workplace pension. Depending on when the request is made, this can either be treated as an opt-out or ceasing contributions.
Understanding the difference helps ensure contributions are handled correctly.
Opting out
Employees can opt out within one month of being enrolled into the pension scheme.
Once an employee is enrolled:
Each employee will receive a welcome email from Penfold.
This email contains a link to the official opt-out form.
Employees can only opt out by completing this form, and it must be done within one calendar month of receiving their welcome email.
If the employee opts out within this timeframe:
They will be removed from the scheme
Any pension contributions that may have been deducted will be refunded in full by the employer
Penfold will then refund the employer
The process must be completed directly by the employee using the form in their welcome email. Employers cannot submit the opt-out request on behalf of an employee.
Please also note that the relevant update should be made in your payroll software to ensure contributions are not deducted going forward.
Ceasing contributions
If the opt-out window has passed and an employee no longer wishes to contribute, they can cease contributions instead.
In this case:
The employee remains a member of the pension scheme
Their existing pension savings stay invested
No further contributions will be taken from payroll
To mark an employee as not contributing in the employer platform:
Navigate to Employees in the employer dashboard
Locate the relevant employee
Click the “…” (three dots) on the right-hand side of their name
Select “Mark as not contributing”
Please ensure this change is also reflected in your payroll software so that future pension deductions are not made.