Hi Priyanka,
It has been a regular practice that employee sends the farewell email, because he is leaving the organization which has given him the opportunity to work. And HR/employer in turn either arranges a farewell party or hands over a small token gift in appreciation before going
If you are not intending to follow these kind of activities, you can give a reply email on his farewell mail thread stating him good luck.
If you want a template,frame a draft with all the contents mentioned like his service tenure, his positives, short comings,achievements,etc and start using it further.