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First auto-enrolment opt-out window opens

Lawyers at A&L Goodbody (ALG) have highlighted what they describe as “the next key milestone” in the auto-enrolment (AE) pension system that came into effect on 1 January.

From today (1 July), participants in the scheme will, for the first time, have the opportunity to opt out of the MyFutureFund retirement-savings scheme.

Since its launch, the National Automatic Enrolment Retirement Savings Authority (NAERSA) has been automatically enrolling employees aged between 23 and 60 who earn at least €20,000 a year and who are not already members of a pension arrangement that meets the minimum required standards.

Refund

In a note on the firm’s website, the ALG lawyers say that employees can opt out of MyFutureFund and receive a refund of their contributions from July.

The firm notes that employees may only opt out during specified windows, with the first two-month opt-out ‘window’ opening on 1 July and closing at the end of August.

Workers can opt out through the participant portal on the MyFutureFund website or by contacting NAERSA directly, after which their Auto-Enrolment Payroll Notification (AEPN) will be updated.

ALG points out that it is important for employers to ensure they are receiving the most up-to-date AEPNs to avoid potential compliance risks.

Contributions

The firm’s lawyers add that, where an employee opts out, employer and State contributions will remain in the employee’s savings pot in MyFutureFund and will not be refunded.

Employees who opt out will be automatically re-enrolled two years after their opt-out date, provided they meet the eligibility criteria (they are under the current State pension age of 66 and not in exempt employment on that re-enrolment date).

The ALG lawyers add that opting out of MyFutureFund is not the only option for employees; six months after enrolment, employees can suspend contributions for a maximum of 24 months.

All contributions, including employer and State contributions, will be suspended during this period but will remain invested on the employee’s behalf.