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Can an employee opt-out of the Civil Service Pension arrangements?

Opting Out

5.9.3 Members have the right to opt out of the CSP arrangements. The member must complete the latest version of the Opt Out form.

If a member has any questions about opting out, they should contact the Scheme Administrator for further information.

Please note: the employer must not ask or force an employee to opt out, or do anything that might suggest that they have. For this reason, it is important that the employer does not give Opt Out forms to employees. The employer must either refer the member to the latest version of the Opt Out form and factsheet, or tell them to contact the Scheme Administrator for a copy of the form or any further information.

5.9.4 The employer is responsible for taking appropriate and timely action to process requests from members to opt out of the CSP arrangements, before copying information to the Scheme Administrator to update their records and take any required pension action..

5.9.5 To Opt Out:

  • the member should complete and sign the Opt Out form and return it to their employer;
  • the employer (HR/Payroll) must insert a date received in the appropriate box on the Opt Out form as soon as they receive it - see note A below;
  • the employer must then complete the rest of the employer section of the form ensuring that information is complete and accurate;
  • the employer should complete the employer information at the end of the form which should be signed by an appropriate HR/Payroll representative;
  • the employer should then follow the Opt Out process (as explained in Annex 5D);
  • the Scheme Administrator will check copies of Opt Out forms received to ensure they have been correctly completed by the member and employer. Any forms that do not have a received date or completed employer section to show that they have been processed by the employer first, will be returned. The Scheme Administrator will process fully completed Opt Out forms received and take any necessary administrative action.

Note A: An opting out period begins from the date that an employee is enrolled into a qualifying scheme or (if later) receives notification from the employer stating that they have been enrolled into a scheme. An Opt Out request is valid from the date the form is received by the employer. Therefore, it is extremely important (particularly for two groups of employees - see note B below), that the employer inserts a date received in the appropriate box of any Opt Out forms they receive on the day they receive them.

Please note: The date that the member is opted out of the scheme is the day after the last day on which contributions are taken. The date the member is opted out of the scheme can either be, at the earliest, the date the form is received (as stated in the appropriate box on the form), or the next available payroll date. Members cannot be opted out of the scheme retrospectively. Therefore, the last day on which contributions are taken cannot be more than 1 day before the exact date the opt out form was received (as stated in the appropriate box).

If the form is not completed correctly, the Scheme Administrator will return the form for correction.

Note B: The three month opting out period for new starters who wish to opt out of the PCSPS or alpha and receive a full refund of their contributions, will continue to apply under the scheme rules, irrespective of automatic enrolment legislation. However, since the introduction of automatic enrolment, there are two groups who must opt out within 1 month of being automatically enrolled if they wish to protect their existing pension status:

  • employees with fixed protection will need to opt out within one month in order to keep their fixed protection;
  • employees with a previous preserved pension in a Civil Service scheme will need to opt out within one month if they wish to receive a refund of contributions made from the automatic enrolment date (depending on whether the previous preserved pension was in the PCSPS or alpha and which scheme they are opting out of – the Scheme Administrator can provide further advice on this).

It is therefore, particularly important that the employees in the above groups complete and submit an Opt Out form quickly and that it is received (and the date received recorded in the appropriate box) by the employer within one month of the start of the opting out period.

5.9.6 The process for refunding members contributions and assessing further actions needed was revised following the introduction of automatic enrolment. The current process is detailed in Annex 5D.

Please note: the employer should only give a refund if they have automatically enrolled the employee who is opting out and received the opting out form within 1 month of the start of the opting out period. In all other cases, the employer must follow the process for ‘NO’ on the Opt Out form as advised in Annex 5D.

5.9.7 Blank

5.9.8 Employees choosing to opt out no longer accrue pension benefits in the CSP arrangements but they may remain entitled to compensation payments and injury benefits. The Scheme Administrator can tell you more about the treatment of optants out.

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