Out of 1900 private sector organisations that applied for clearance from the National Pension Commission (PENCOM) to qualify for participation in Federal Government contracts in 2021, a total 1,877 have been cleared.
PENCOM has issued them Pension Clearance Certificates, as evidence of their full compliance with the Pension Reform Act 2014, according to the last quarter report of the Commission.
This is another 23 applicants were turned back for failing to comply fully with the provisions of the law, which requires that affected organisation enroll and remit the pension contribution of their employees, as well as provide group life insurance cover for them.
The last quarter report of the Commission also show that a total sum of N9, 878,025,459.10 was remitted into the Retirement Savings Accounts of 41,923 affected employees of the 1,877organizations.
March 31 is the deadline for companies wishing to participate in Federal Government businesses to get the certificate or forfeit participation in the current.
To enhance compliance with provisions of the Pension Reform Act in respect of group life insurance and contribution remittances, PenCom had advertised in the severally with the notice to all employees to demand for their rights to life insurance policy and pension contributions.
The advertorial read: “This is to remind all employees in the Public Service of the Federation, Federal Capital Territory and States that have implemented the Contributory Pension Scheme as well as private sector, that it is their rights; under section 4(5) of the PRA 2014 to have life insurance Policy taken on their behalf by their employers for an insured amount not less than three (3) times their annual total emolument.”
“Please note that employees are also required to ensure that all pension contributions deducted from salaries and/ or contributed by employers are remitted to the Pension Fund Custodian (PFC) by the employer not later than seven working days from the date of payment of their salaries”.
The Commission therefore advised employees to report to the Commission where the employer fails to procure the minimum required life insurance policy in their favour; submit the evidence of compliance with life insurance policy to the Commission and place the certificate in a conspicuous place within the organisation; and remit the deducted pension contributions into their Retirement Savings Accounts.
In accordance with the provisions of Section 4(5) of the Pension Reform Act (PRA) 2014 and Section 5.5 of the Guidelines for Insurance Policy for Employees, Employer of labour covered by the PRA 2014 are required to submit copies of the Insurance Certificate with the schedule of benefits to the National Pension Commission (PenCom).
The Insurance certificate should state that all employees are covered up to an amount not less than 3 times their respective annual total emoluments (ATE).
Employers that have not yet submitted copies of Insurance Certificate for the current year to the Commission were therefore advised to do so before 31 March each year, failing which the National Pension Commission would consider such employers in default of Section 4(5) of the Pension Reform Act (PRA) 2014.
Pension Fund Operators Association of Nigeria (PenOp) stated that compliance among employers and actual remittance is critical for the continued sustenance of the scheme.
It however lamented that; it is rather unfortunate that some employers that have three employees and above have not thought it wise to embrace the scheme for the benefit of their employees and their organisation.
According to the trade body, not only does this enhance employee’s commitment to duty and increased productivity, it opens door for the institutions to partake in government contracts.
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