Your nanny can opt out of a pension scheme

A nanny who has been automatically enrolled to your workplace pension scheme has the right to opt out. The decision to opt out must be freely taken by your nanny – ie you cannot ask him or her to opt out.

When a job holder can opt out

Once a nanny has been enrolled into your pension scheme he or she has one calendar month to opt out and get a full refund of contributions. The opt out period starts from whichever is later:

• The date membership of the scheme became active
• The date they received a letter from their employer with the enrolment information
• If employees decide to leave the scheme outside of this period they will be ‘ceasing active membership’ and they may not get a refund (this will depend on the pension provider rules).

The opt-out notice

If your nanny wants to opt out he or she will have to get an opt-out notice from the pension scheme provider, or fill out an online form. This is to avoid any employer involvement in the decision to opt out.

Refunds

If your nanny opts out you will have to give them a refund of any contributions that have been paid into the pension scheme as long as they opt out within a calendar month.

What happens next?

If your nanny changes his or her mind then they may be able to opt back in but you’ll need to check with your pension provider if this is possible.

Opted out employees will normally be put back into the scheme at re auto enrolment which happens three years after your scheme was set up.

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• The Pensions Regulator Detailed Guidance