Employees may choose to leave the pension scheme at any time, either by ceasing contributions or leaving their employment entirely. Employers must ensure their records are updated accordingly.
1. Marking an Employee as a Leaver in Your Data File
If the employee has left your employment:
Enter their leaving date in the "Employment Ended" column of your data file.
Payroll software may automate this process if integrated with pension management.
If the employee has left the pension scheme but remains employed:
Remove them from your data file or ensure ‘LS’ is entered in the ‘Starter/Leaver Flag’ column.
2. What Happens When an Employee Leaves Their Employment?
The employee ceases active membership of the pension scheme.
Both employee and employer contributions will stop.
Employers must update the pension data file with the employee’s leaving date before uploading it.
The pension provider will send the employee a ‘leaver’ letter detailing their pension options.
By following these steps, employers can ensure a smooth transition for employees leaving the scheme while maintaining accurate records.