If you are inquiring about a refund related to an employee's automatic enrolment status, it's important to first understand the specific conditions under which a refund is applicable. Generally, a refund might be issued if an error occurred in the enrolment process, or if the employee opts out within the permissible time frame but has already made a contribution to the pension scheme. To address issues with unexpected refunds, follow these steps:
1. Verify the enrolment status of the employee in your system. Make sure the enrolment date and terms align with company policy.
2. If the employee should not have been enrolled, reverse the enrolment status as applicable if the payslip has not yet been finalised and submitted. To do this ensure the payslip is open, then go to the employee's AE section. At the bottom of the page, click on the small blue 'Undo' to undo the enrolment status.
3. Utilise the opt-out feature if the pension has already been processed in the previous period.
4. Contact support if further clarification or assistance is needed, especially if the eligibility criteria for a refund are not clearly outlined in your knowledge base.
By following these guidelines, you can effectively manage refund inquiries related to employee enrolment errors.
FAQs
Q. Can an employee be enrolled / re-enrolled and choose to opt out in the same payment period?
A. Yes an employee can opt out within the same period that they were enrolled or re-enrolled. The employer is required to enrol the employee to fulfil their AE duties and send the enrolment summary to the pension provider. They also need to issue the employee with an enrolment letter. If the employee chooses to opt-out before payroll is processed for that period, the pension provider will send the employer an opt-out notice. The opt-out date and reference (if applicable) should be entered into BrightPay.
As the employee was enrolled / re-enrolled and opted out in the same payroll period, no pension contributions should be taken (and no refund required).
Q. What if the employer receives an opt-out notice after the payroll period has been processed and the employee has been paid?
A. The employee can be opted out in the next period and issued a refund via payroll. You may need to enter an opt out date within the current period in order to process the refund. Finalise the payslips as usual. Then go back to the AE section for the employee - the Opt out date should match the same date provided by the pension provider. If it needs to be amended, click on the date and enter the correct one.
Q. An employee was enrolled in month 12 of last tax year and now opted out in month 1 of the new tax year, why is there no refund appearing on the payslip?
A. A refund in a new tax year would create a negative YTD figure for pension contributions on the FPS, as the original deduction was taken in the previous tax year. HMRC will not accept negative YTD figures so will reject the RTI submission. You will need to create an addition on the payslip to refund the employee their pension contribution.
NB: for tax relief at source pension schemes the addition would be a net addition (not subject to PAYE or NIC); for net pay arrangement the addition would only be subject to tax (not NIC); for salary sacrifice refunds the manual addition would be subject to both PAYE & NIC.