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Introduction to the L1 leaver form
The L1 form is the Fund’s full leaver notification. Our employers must send this form to dpf.employers@derbyshire.gov.uk when an employee leaves the Local Government Pension Scheme (LGPS). This is usually when someone’s employment ends but can be for other reasons too. All leaving reasons are listed on the L1 form.
When someone leaves the scheme, our Fund must provide them with information about their pension options. This is usually within one month of leaving, so it’s important that you submit the L1 without delay.
Without the L1 form, we can’t pay the pension which your former employee may be relying on to replace their monthly pay.
Authorised signatories
You’re required to provide the Fund with contact information and signatories. This is a list of staff who are authorised to sign notification forms. The L1 must be signed and submitted by one of your authorised staff.
The form requires information about the reason for leaving and pay details, so it may require input from more than one part of your organisation. The authorised person who signs and submits the form is responsible for all the information provided. If there are any issues with the form when our team checks the data, we’ll contact the person who authorised the form.
Please contact the Fund’s Regulations and Communications Team to update authorised individuals: pensions.regs@derbyshire.gov.uk
If an external contractor provides your payroll services, they may be responsible for completing the form depending on the service agreement.
When to complete an L1
If you submit monthly data through i-Connect, you should provide an L1 for all employees that leave the scheme who:
- are over age 55 at their leaving date
- are leaving on ill health retirement
- have died in service
If you’re not submitting monthly data through i-Connect, you should provide an L1 form for all leavers.
You should normally complete an L1 for your former employee immediately after their final pay has been confirmed.
If your retiring employee is on regular, consistent pay which will remain unchanged to their retirement date, you should submit the L1 up to 6 weeks before their employment ends. This helps us to work out their pension benefits and put these into payment as soon as possible.
There are a few consequences of late submissions, such as:
- financial hardship caused to your former employees
- the Fund being unable to update your employees pension records
- queries from the Fund
- you being charged for the additional administration caused by the delayed L1 submission
L3 leaver form (i-Connect)
The L3 is the shortened leaver notification form. Employers who submit monthly data using i-Connect must provide this to the Fund.
An L3 is required for employees that are under age 55 when they leave the scheme and have pension service prior to 1 April 2014. You should provide these based on your records however if the Fund identifies a leaver where an L3 is required but hasn't been received, one will be requested.
Exceptions
There will be instances where an employee stops paying into the scheme but an L1 is not required. These will be cases where the employee remains a scheme member but has temporarily stopped receiving pay.
The information that you submit through i-Connect (or on your year-end return) indicates when the employee has had a period without pay.
Some examples are:
- Sickness: If an employee is absent long-term and stops paying into the LGPS due to sick leave, you’ll still make employer’s contributions (based on Assumed Pensionable Pay, also known as APP). An L1 shouldn’t be submitted until their employment with you has ended.
- Maternity, adoption, paternity or shared parental leave: If an employee stops paying into the LGPS because they have run out of paid leave, but will be returning to work after their leave, an L1 should not be submitted.
- Other periods of unpaid leave: Where an employee has periods without pay and stops paying into the LGPS for career breaks, unauthorised leave or industrial action, then returns to work, an L1 should not be submitted.
How to complete and submit the L1
All employers must complete the latest version of the L1. This is available on our Forms for employers. Earlier versions of the form shouldn’t be used and won’t be accepted.
The L1 is interactive. Questions and information will pop up when you fill in some fields.
You must complete the form electronically and in section order. Printing the form and completing it manually will not provide all of the information needed and will be returned to you.
Please submit completed forms securely to dpf.employers@derbyshire.gov.uk.
The following guidance tells you what to enter into the fields on the different sections of the L1 leaver form.
Employer name and reference
You must always complete your employer’s name and reference number. This is given to you by the Fund. Your employer’s name and reference number are on your CR1 template. For the L1, you need the last 3 digits of your employer reference number.
Section 1. Leaver personal details
This section of the form relates to the employee’s person details and asks for the following:
- Title
- Forename
- Surname
- National Insurance number
- Date of birth
- Employee number
- Post reference
- Home address
- Postcode
- Phone
If you don’t use unique employee numbers for posts and the employee held multiple positions, you must complete the "post reference" field to identify the relevant position.
Section 2. Leaving details
This section of the form asks for information about the member at their last day of service:
Date of Leaving / Opting out / Death
Please complete the date when the employee left the LGPS.
Where a member with a casual or zero hours contract leaves employment, please use the date when the contract ends as the leaving date for the L1 (rather than the last date they actually worked).
If a member opted out within 3 months of joining the LGPS, you must refund the contributions they paid through your payroll and enter the date of opting out as the date they had joined the scheme. This is so they are treated as not being an LGPS member in this employment.
Age
This populates automatically when you enter the date of birth in Section 1.
Payment days at last day
Please enter the payment days applicable at the member’s last day of service. This field defaults to 365 days, as most LGPS staff are paid all year round.
If an employee works term time at a school, then it should be reduced accordingly. For example, a term time worker that works for 39 weeks of the year (273 days) then has 6 weeks added made up of annual leave, public holidays, and extra statutory days. This takes it up to being paid over 45 weeks (315 days), resulting in the payment days being entered on the form as 315. The method of working out payment days will vary from employer to employer.
Working hours
Please enter the contracted hours and full-time equivalent hours as a decimal as at the date of leaving. For example, 18.50 for 18 hrs 30 minutes.
If the employee was a casual or relief worker at their date of leaving, please enter “C” in both boxes.
Reason for leaving
You must select one of the options by adding a cross from the drop-down box alongside the chosen reason:
- Opted out: Select if the member decided to opt out of the LGPS. You must only accept opt out elections that have been made on the Fund’s opt out form, which the member must have obtained themselves. You must not provide blank copies of the form to employees as that may be deemed as an inducement to opt out. A signed letter or email is not admissible as it is not a declaration of awareness about the scheme benefits being given up. You must retain a copy of the opt out form. You may need to provide evidence of the opt out at any time. Please don’t send a copy of the completed opt out form with the L1. If the member is age 55 or over, they don’t automatically become entitled to their pension benefits when opting out.
- Compulsory transfer: Select if the member has left your employment as a result of Transfer of Undertakings Protection of Employment rights (TUPE). You must add the name of the new employer (and a contact if known) in the field alongside this option.
- Under 55 Resignation / Redundancy / End of contract: Select if the member was under 55 at their date of leaving and they either resigned, their post was made redundant, or the member’s contract has terminated or expired.
- Dismissal (Including ill health capability): Select if the member was dismissed for reasons other than gross misconduct. You should also select this reason if they were dismissed on the grounds of ill health capability but were not granted LGPS ill health retirement.
- Gross misconduct dismissal: Select if the member was dismissed for gross misconduct due to criminal, negligent or fraudulent actions. Under the LGPS regulations, you may seek to recover financial loss from your former employee’s pension as a direct result of their actions. If you wish to seek recovery of financial loss, the Fund’s "C4 – Dismissal form" must be completed as soon as possible. You can find a copy of the C4 Form on our Forms for employers page. If no form is received alongside the L1, once pension benefits have been put into payment, monies cannot be recovered.
- Redundancy 55+ / Efficiency dismissal: Select if the member is age 55 or over and has been made redundant. If an eligible member is on or over age 55 and they leave employment on either compulsory or voluntary redundancy, LGPS benefits will be payable immediately and can’t be deferred. You should also select this reason if the member’s employment has been terminated to benefit service efficiency and they’re being granted early retirement. An authorised signatory must submit written confirmation of redundancy or efficiency on headed paper to release LGPS benefits. This letter should also confirm the contact details of the person who is responsible for payment of any shortfall costs to the Fund.
- Flexible retirement: Select if the member is age 55 or over and has employer approval to take flexible retirement. Even though the employee is continuing to work less hours and / or on a lower grade, you must still submit an L1 to initiate the flexible retirement process. We’ll need written confirmation of the decision on headed paper from a signatory who is authorised to pay LGPS benefits. This letter should include details about the change to the employee’s contract, their revised LGPS contribution rate and details of the person responsible for payment of the shortfall costs to the Fund. In respect of the continuing employment, you should also state whether the member wishes to remain a contributing member of the LGPS or not. You must continue to collect the appropriate pension contributions from the employee’s pay unless they opt out of the scheme.
- 55+ Retirement / Resignation / End of contract: Select if the member is age 55 or over and they voluntarily resign, retire or their contract comes to an end. The Fund will contact the member with their pension options. If your employer discretions policy gives you the option to waive any actuarial reductions where the scheme member is retiring early, you must notify the Fund of your decision. If you agree to waive any reductions, there will be a shortfall cost payable to the Fund.
- Employee reaching age 75: Select when a member is approaching age 75. LGPS benefits should be in payment before age 75. Members remaining in employment are not allowed to continue to contribute past this point. An L1 must be submitted, and contributions must cease to be taken from the member’s pay. You must ensure that you remove them from the LGPS at least 1 day before their 75th birthday.
- Ill health retirement: Select if the member has been granted ill health retirement. The Fund cannot release pension benefits until you have submitted a fully completed Medical Certificate, including which tier of ill health benefits has been approved. For Tier 1 and Tier 2 ill health retirements, you must also complete the "Annual Rate of Assumed Pensionable Pay field", which will appear in section 4a when you select ill health retirement as the reason for leaving.
- Death in service: Select when a member has passed away whilst in employment. The Fund will need additional information about the next of kin to arrange payment of any death benefits. The person specified will not automatically become the beneficiary but will be asked to provide further details. For all death in service cases, you must complete the "Annual rate of assumed pensionable pay" field, which will appear in section 4a when this reason for leaving is selected.
Section 3. Contributions
You only need to complete details for the current year if you have already provided data for the previous year via i-Connect or by year-end return. If you haven’t already provided the previous year’s data, then you will also need to provide this on the form.
Employee contributions
For each scheme year (1 April to 31 March) you need to provide information for all sections which apply. The “Year ending” field will complete automatically based on the date of leaving you entered earlier on the form.
If the member moved between the LGPS main section and 50/50 section during the year, you must provide the contribution totals for each section.
If the member’s employee contribution rate changed during the year, we’ll need some extra details. Please provide the sums paid in respect of each contribution rate and include the date the rate changed in section 5, “Notes”.
If the member paid any Additional Regular Contributions (ARC) or Additional Pension Contributions (APC), you must provide the total paid during the year. This includes the employee’s contribution paid to cover any “lost” pension.
Employer contributions
This information is only required if APP was applied during the year. APP applies to your employee’s absence due to sickness or child related leave. If it was applied, please include the total sum of employer contributions paid. Please also provide the applicable dates and the annual APP rate on which the contributions were based in section 5, “Notes”.
You should still pay full employer contributions based on APP if the employee is on reduced pay due to sickness or child related leave.
AVC contributions
This information is only required if the employee paid Additional Voluntary Contributions (AVC). You will have sent these contributions directly to the AVC provider (for example Prudential). We require details of the contributions paid during the tax year (6 April to 5 April) and the date of the final AVC payment.
We need this information to assess the member’s pension savings for tax purposes. We also need to ensure the AVC fund is disinvested at the correct time.
Section 4. Pay details
If you have already provided data for the previous year via i-Connect or by a year-end return, you only need to complete details for the current year. If you haven’t already provided the previous years data, then you’ll also need to provide this on the form.
4a – CARE Pay (2014 definition of pensionable pay)
CARE pay is pensionable pay under the definition applied from 1 April 2014. It is usually the member’s actual pay and includes non-contractual overtime.
Please refer to our pensionable pay page for the definitions of what is pensionable in each section of the scheme.
- Main section basic pay: This is the member’s standard contractual pay. It is the total of pensionable pay in the scheme year from 1 April to leaving date. If you complete this form before the leaving date, (for example when a member on regular pay is retiring), you must enter what the total pay will be up to and including the leaving date. If the employee was on reduced or nil pay and APP applied, the basic pay must include the APP.
- Main section additional pay: This is the total of additional pensionable payments and allowances paid during the scheme year.
Please ensure that you provide basic and additional pensionable pay separately. We’ll make our own checks on the data. Splitting the allowances from the basic salaried pay will reduce any queries sent to you.
- Basic 50/50 section pay and 50/50 section additional pay: If the member was in the 50/50 section of the scheme, please provide the pensionable pay for this membership. If the member changed from the 50/50 section to the main section, or vice versa during the scheme year please provide the date (or dates) the change occurred in section 5, “Notes”.
- Total: This calculates automatically.
- Any unpaid absences: Please select from the drop-down list whether the member had any unpaid absences (for when APP did not apply, or the member had not elected to pay Additional Pension Contributions to buy back lost pension). Please select “Yes” or “No” on the drop-down and provide the dates of any periods of unpaid absence in section 5, “Notes”.
- APP applied: Using the drop-down options, please select the reason for APP or select “No” if not applied. If APP applied, please give the start and end dates for which APP was applied and any dates of unpaid child related leave in section 5, “Notes”.
- Annual rate of Assumed Pensionable Pay (for Death in service, or Ill health Tier 1 & Tier 2 pensions only): Please provide the annual rate of APP at the date of ill health retirement, or date of death. We use the figures you provide to enhance the pension benefits payable. This is required whether or not APP has been applied.
4b – Final pay (2008 definition of pensionable pay)
We use the final salary information you provide in this section to calculate pension benefits prior to 1 April 2014. The membership the final salary relates to may not have been in this employment. This section should always be completed (unless you are certain that the employee has no LGPS membership in this employment or any other employment prior to 1 April 2014).
You can check our pensionable pay page for the definitions of what is pensionable in each section of the scheme.
The final pay figure can be worked out in the following ways:
- Final year: This is standard calculation and is the average of a member’s full time equivalent pay for the final 365 days of employment. Please complete the best of 3 calculator (on the second tab of the L1) which will assist with calculating the final pay.
- Best of the last 3 years pay: This is the last 3 periods of 365 days, up to the leaving date. Always complete the best of 3 calculator (on the second tab of the L1), as it will work out which of last 3 years is the best year and insert these details into section 4b of the L1 form.
- 3 in 13: The average of the best 3 consecutive years pay from the last 13 years. This applies for members who have protected pay due to a reduction.
If the member entered your employment through a TUPE within the last 365 days of LGPS membership, you should attempt to obtain the relevant pay data from the previous employer or payroll provider.
'Pensionable allowances' should be added if there are any irregular or fluctuating extra payments paid in addition to salary or wages, which are specified in the employee's contract of employment as being pensionable and also recognised as being pensionable under the 2008 LGPS regulations.
"Start date of year used" and "end date of year used" will populate automatically from the Best of 3 calculator to give the dates of the best year.
4C – Validation:
This part of the L1 acts as a checking tool to make sure that the final pensionable pay you provide seems reasonable based on the:
- time period worked in the final scheme year
- hours worked
- CARE pensionable pay
It takes the CARE pay for the latest scheme year, (which unless the member left on 31 March, is a part year) and it projects it to an annual figure. If the member is part time, it also grosses it up to a full-time rate.
For example, the actual pay for a member that works 18.5hrs of a 37-hour week, leaving on 30 April, is reported as £1,000. The notional final pay that would be produced would be £24,333.33. The formula is CARE x (365 / number of days worked in final year) x (weekly hours / contracted hours).
The figure produced may not be exact, as there may be reasons for it to fail, such as a pay rise mid-year for example. It’s a guide as to what we check for when processing leavers. It highlights when we need extra information such as details of breaks in service which would cause the CARE pay to not agree with the final pay provided.
For the 'Full time equivalent pay at last pay change' field, please input the member’s full time equivalent pay at the date of leaving and indicate when the rate applied from. This should match the most recent pay rate provided on the "Best of 3 calculator".
If the pay is reduced by payment days / weeks, please add the relevant information in the box provided.
If your employee received a Living Wage enhancement to their contracted pay, you must show the annual full time equivalent rate on which the Living Wage paid was based. The Living Wage is not published as an annual salary, however a full-time equivalent rate should be determined and used in the consideration of the Final Pay.
Section 5. Notes
Please include details of the following instances with applicable dates in this section:
- 50/50 section
- APP being applied
- Unpaid absences or unpaid leave in the final year where APP did not apply, or the member has not paid Additional Pension Contributions to buy back “lost” pension.
- Periods when you were unable to obtain the pay information. This includes where there has been a TUPE in the final year of membership.
Please also provide any other information in this section which you think is relevant to help us accurately calculate the member’s pension benefits.
Tip: To move to a new line in the Notes section, select 'Alt' and 'Enter'.
Section 6. Declaration
The declaration must be signed and submitted by someone who is authorised to complete Fund notification forms for your employer. If you need to check if you're currently authorised to complete notification forms, or need to be authorised, please contact us: pensions.regs@derbyshire.gov.uk
The L1 requires information about the reason for leaving and pay information, so may require input from more than one part of your organisation, however, the authorised person signing and submitting the form is responsible for all of the information provided.
Best of 3 Calculator
Please input the pay changes into the calculator. You can refer to the Best of 3 instructions tab for further information.
If the member had less than 365 days in the post (and had not entered your employment through a TUPE), you should insert their earliest pay rate into the yellow box in the Best of 3 Calculator (followed by any subsequent pay changes). This is so the calculator can provide an average based on the assumption the member would have been on the same rate from the beginning of the final year period.
You should also enter the total allowances the member would have received, had they worked for you for the entire year.
If you are unable to obtain the earlier pay data, please enter the data you have in section 5, 'notes', explaining the reason for the incomplete data.
If you are confident that the member’s pay (during the last 3 years of LGPS membership), prior to the TUPE was the same or less than in your employment, you may enter the earliest pay figure you have into the yellow box in the Best of 3 Calculator. This will allow the calculator to provide an average for the final year. If you do this, you will also need to enter the total allowances the member would have received for the entire period.
Protected pay
If the member has Reduction in Pensionable Pay Protection, you should complete the Protected Pay tab with the pay information for the last 13 years, referring to the Protected Pay instructions tab for further information. You won’t always know whether the employee has this protection, and the Fund will contact you if this is required.
Best of 3 at age 65
This tab is relevant if the employee was aged over 65 at their leaving date. This is the same principle as the Best of 3 calculator tab but asks for the final pensionable pay for the year up to turning age 65, rather than up to the leaving date. The L1 will prompt you if the person was over 65 at their leaving date and ask you to complete this additional tab.
This data is required so we can calculate whether the individual is due a guaranteed amount due to the McCloud judgement.
Further help
If you require further help with understanding or completing the L1 form, please contact pensions.regs@derbyshire.gov.uk or call our helpline on 01629 538900 for assistance.