Important Update – Introduction of New 161 Form for Employment Termination Reports Starting January 1, 2024
As we continue to evolve in our regulatory practices, we wish to remind you that effective from January 1, 2024, the notification of employment termination must be submitted using the new Form 161. This updated reporting format places greater responsibility on employers as it now requires specifying the pension plan options chosen by the employee.
The integration of the old Form 161 with Form 161A, previously used for reporting pension continuance, means that all necessary details for employment termination, including pension continuance, will be consolidated into one comprehensive form. The new Form 161 includes additional data fields such as the type of pension entitlement (automatic, conditional, or non-entitlement), the pension fund account number, and whether the employee opts for pension continuance even in the event of death.
New Form Structure:
- Part A – Employer Notification: Employers report details of their employee’s termination.
- Part B – Employee Notification: Employees fill out their requests regarding retirement grants and make necessary declarations.
- Part C – Employer Calculation and Pension Fund Instructions: Employers calculate the termination amounts and guide pension funds on financial characterisation and tax deductions.
If the standard conditions do not apply, employers must direct employees to a tax officer for instructions on accessing the funds entitled under Form 161.
Submission Process:
- Employers need to fill out Form 161 focusing on Part C, and submit it to the responsible tax officer.
- In cases where pension fund instructions from Part C are received, employees must forward this form to their respective pension funds.
Attachments Required:
- When submitting Form 161, include the last three pay slips of the employee (additional documentation may be requested by the tax office).
Responsibility for Notification Submission:
- The responsibility lies with both employers and employees, particularly if employees are directed to a tax officer.
These changes emphasise a greater workload and responsibility but are designed to streamline and enhance the transparency of the employment termination process. We appreciate your adjustments to these new requirements and are here to assist with any questions or concerns you might have regarding this transition.
