• Monday, December 11, 2023
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PenCom recovers N24.53bn in Q1


To ensure compliance in the private sector, the National Pension Commission (PenCom) engaged the services of recovery agents to compel employers to remit employees’ contributions. They also institute legal action against defaulters.

The recovery agents recovered a total of N24.533 billion as of the first quarter of 2023, comprising N12.440 billion principal contributions and N12.093 billion penalties, according to PenCom.

The monies, which have been moved to Pension Fund Administrators (PFAs) and remitted to Retirement Savings Accounts (RSA), covers the period from the commencement of the recovery exercise in June 2012 to March 31, 2023.

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The Pension Reform Act 2004, as amended in 2014, establishes the Contributory Pension Scheme (CPS), which mandates employer-employee contributions for retirement in Nigeria.

During the first quarter of 2023, the sum of N384.28 million, comprising principal contributions of N193.059 million and penalties (N191.222 million) was recovered from 34 defaulting employers.

CPS is an arrangement where both the employer and the employee contribute a portion of an employee’s monthly emolument towards the payment of the employee’s pension at retirement.

According to the law, the minimum contribution under the Act is 18 percent of monthly emolument, with a minimum contribution of 10 percent by the employer and 8 percent by the employee.

However, any employer in both the public and private sectors that fails to comply with this law has committed an offence punishable according to the PRA 2014.

Section 11 (6) of the Pension Act 2014 states that any employer who fails to remit the contributions within the time prescribed shall, in addition to making the remittance already due, be liable to a penalty to be stipulated by PenCom.

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The penalty, according to the pension law, shall not be less than 2 percent of the total contribution that remains unpaid for each month, or part of each month that the default continues, and the amount of the penalty shall be recoverable as a debt owing to the employee’s retirement savings account as the case may be.

PenCom has continued to maintain the services of recovery agents for the recovery of unremitted pension contributions and penalties from defaulting employers.

In the third quarter period, demand notices were issued to defaulting employers whose pension liabilities were established by the Recovery Agents.

Meanwhile, four defaulting employers were forwarded to the Commission Secretariat/Legal Advisory Services Department for prosecution.

Aisha Dahir-Umar, director-general of PenCom, had called on employers to make prompt remittance of their workers’ pension deductions.

Dahir-Umar, who was represented by Babatunde Alayande, head, South West Zonal Office of PenCom, at a pension seminar in Lagos, said for pensions to be smart in order to equip employees for a better future, employers are expected by Pension Reform Act, to ensure the remittance of pension contributions of employees into their RSAs within seven days of salary payment.

Ikenna Chidi-Ebere, head, Consumer Protection Department at PenCom, who spoke at a seminar for journalists in Lagos, said PenCom was creating a Consumer Protection Department (CPD) to ensure protection of rights and effective service delivery to RSA holders and retirees.

He said the creation of CPD was anchored on the fact that the commission’s new strategic plan prioritises the quality of services rendered to consumers in the pension industry.

By adopting a customer-centric approach, the focus is on understanding the needs and preferences of contributors and retirees, he added.