Notifying Termination

Notifying Termination

When your employee ceases employment with your company, be sure to do two things. First, arrange for the last contribution and second, notify your trustee about the termination.

Last Contribution

You should arrange for the last payment of the departing employee’s mandatory contributions to be made together with those of other employees on or before the “contribution day” of the following month, that is, the 10th day of that month.

For example, if your employee’s last day of employment is 7 February, your last payment of contributions for him should be made on or before the 10th day of the following month, i.e. 10 March.

Note: Information on how to make the last contribution for casual employees in the construction and catering industries can be found here.

Notice of Termination

When you have a departing employee, it is important that you notify your trustee promptly so that the trustee can update the account records of the employee. Apart from being a statutory requirement, notifying your trustee will prevent you from being mistakenly treated as a suspected defaulter, as your trustee, without knowing one of your employees has left, may report to the MPFA your failure to contribute for that employee as a default.

There are two ways to notify your trustee of the departure date of your employees. You can notify your trustee in writing or by making use of the remittance statement.

In the remittance statement, there is usually a section designed for you to report termination of employment of your employees. Simply fill in the required information in that section, such as the name of the departing employee and his/her last day of employment, and send the remittance statement to your trustee along with the contributions. The deadline for notifying your trustee is the 10th day of the following month, the same deadline for making the last contribution.

Alternatively, you may also notify your trustee about the employee’s termination of employment through a written notice. Some trustees may have a Notice of Termination form for you to use. Please check with your trustee to find out about the proper procedures. In any case, be sure to observe the deadline mentioned above if you send your notification separately in writing.

The maximum penalty for failing to report termination of employment to your trustee is a fine of $20,000.

Note: Information on how to notify termination of casual employees in the construction and catering industries can be found here.