• Saturday, July 13, 2024
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BusinessDay

PenCom moves against defaulting firms on remittance

PenCom

Worried by the non remittance of pension contributions running into billions of naira, the National Pension Commission (PenCom) has given defaulting firms two weeks from the middle of January to pay up outstandings, plus interest or face legal action, BusinessDay investigations reveal.

Regarding the action of defaulting firms as contravention of the Pension Reform Act of 2014, the commission has requested them to show evidence of payment, and emphasises it will not enter into any negotiation with them.

BusinessDay further gathered that papers are being prepared to take defaultrs to court any moment from now. 

Analysts say this action is auspicious, coming at a time that the Federal Government is thinking of deploying the over N5 trillion contributions to critical sectors of the economy, under public private partnership arrangement.

Babatunde Fashola, minister of Energy, Works and Housing, recently said that if South Africa’s Public Investment Corporation (PIC), Nigeria’s equivalent of PenCom could have over $289 million of its assets under management in the economy, the time for Nigeria to deploy the PenCom funds is now, so as to bring about development. 

Nigeria had 6.74 million contributors to its pension scheme, with pension assets of N6 trillion as at the end of 2015, out of a labour force of over 74 million people. 

However, some analysts said at the weekend that the action of the commission, though commendable, is belated, as some contributors had died without receiving their contributions from their PFAs, due to non-remittance by their employers.

They are blaming the Pension Fund Administrators (PFAs) for not raising an alarm anytime the employers failed to remit the contributions. 

Similarly, they argue that PenCom also should be blamed for keeping quiet over a very long time. 

Friday Ameh, energy analyst, said employees should blame both the PFAs and PenCom for non-remittance of workers’ contributions.

“Both the PFAs and especially the regulator, PenCom, have failed in their moral duties to protect the interest of the employees and this has resulted into huge sums of money not being remitted by employers.” Ameh said.

But PenCom insists that its action is predicated on a formal complaint from the aggrieved employee to the commission.

Emeka Onuora, spokesperson for the commission, in response to BusinessDay inquiry said, “Any employee that has any complaints about non-remittance of his contributions should formally bring his complaint to the commission.

The complaint should first start from the employee himself, by formally notifying the regulator of any infraction regarding his contributions.

“From there his issues will be taken up. He doesn’t need to know what the regulator is doing about his matter before bringing it up. Besides, there are procedures for dealing with issues like these. There are recovery agents engaged by the regulator to recover unremitted contributions from employers with penalties (interests) in favour of the employees. Some employers have been taken to court in this regard.”

But some other analysts have faulted the commission’s defense, saying it amounts to abdication of responsibility.   

“Otherwise, what is the essence of the monthly rendition of returns by the PFAs or occasional audit of their books by PenCom, if all the employees are requested to lodge complaints with the commission,” queries an employee.

Fashola, in a keynote speech at the Nigerian Pension Industry Strategy Implementation roadmap retreat last week said, “In contrast to the mismanagement that used to be the story of our own pension funds, the most prolific of the pension funds in Africa, which is the South African Public Investment Corporation (PIC), has over $150 billion assets under management.

In Nigeria alone, South Africa’s PIC have $289 million in Dangote Cement; $98million approved but yet to be drawn for Notore Fertilizer, $230million in MTN Nigeria, $270million in Erin Energy (formerly CAMAC) and $150million in Mainstream Energy Solutions (in the power sector of Nigeria). 

“By contrast, the question to ask is what is the ‘home based’ pension fund doing? Those investible vehicles exist. They are on roads that can be tolled, like housing, the 4th Mainland Bridge, the Coastal Road linking several coastal states from Lagos to Bayelsa; the new seaport in Lekki and Badagry; the refinery by Dangote; Ajaokuta Steel; a petrochemical plant in the Niger Delta; the broken textile mills in the North and South of Nigeria that require new equipment and disciplined fiscal, technical and organizational management; and the list is endless. It is as long as we can imagine. The time for it is now.”

John Omachonu