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. Do I still need to enrol / re-enrol an employee if they've told me they want to opt out?

A. Yes, you still need to follow the correct procedure to stay compliant with The Pensions Regulator's requirements. Enrol / re-enrol the employee on the software and submit the enrolment summary to your pension provider. Provide the employee with the auto enrolment letter. The employee can then contact the pension provider and opt out. The pension provider will then inform the employer via an opt out notice. The employee can then be opted out on BrightPay.

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.

The YTD information will still need correcting for the previous tax year however. To do this;

• Re-open the payslip for month 12 in the previous tax year and opt the employee out in the Automatic Enrolment section.
• Finalise the payslip again.
• Go to the RTI section > New > Additional FPS - send for this one employee with 'correction to earlier submission' as the late reporting reason. Submit to HMRC.

This will correct the YTD pension figures with HMRC. Then in month 1 in the current tax year, you can create the pension refund addition to refund the amount back to the employee.

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.

In this scenario it will not be possible to show the Employer refund on the payslip, as this would result in a negative ER Pension YTD figure which HMRC will not accept on the FPS.