The employee exit process can be time-consuming. Let us make it easier for you. We’ve compiled a list of the most common questions that arise when employers are closing out recently terminated employee records.
Can I report my employee’s last day in pay (LDIP) during the termination process?
Yes, when it comes to reporting LDIPs, the sooner, the better! We request that our employers report LDIPs as soon as your employee leaves their position. If your employee is retiring or switching jobs, this process allows them to get access to their funds more quickly and saves you a call from us! You can even submit the LDIP and LCD information directly into ERM up to 60 days before the LCD.
What exactly is severance pay?
Severance pay is compensation paid to an employee when an employer terminates employment. Severance includes, but is not limited to, retirement bonuses and commutation of unused sick or personal leave. It is Indiana law to report your employee’s severance.
Please remember to submit severance pay in the designated fields on your wage and contribution file uploads. If this does not happen, a member’s annual salary is affected, resulting in a miscalculation of the member’s benefit. For a quick review on this step, refer to the ERM Wage and Contribution Manual along with our Employer Reporting and Maintenance (ERM) Wage and Contribution (W&C) File Layout Specification.
What is the difference between LDIP and the last check date?
LDIP stands for last day in pay, which is the last day the member physically worked for your unit, whereas the last check date represents the last check received by the member from the unit. Often, the last check date’s pay period range includes the last day in pay reported for the member.
Reporting this information late can result in members seeing a delay or a miscalculation of their retirement benefit. Following these guidelines will make your exiting process less of a hassle and speed up the process! If you have any questions about entering a termination life event into ERM, give our Employer Advocate team a call at (888) 876-2707.