A technology targeted at enhancing interaction between employers of labour and administrators of the pension scheme called, Electronic Pension Contributions Collection System (EPCCOS) is making pension remittance a lot easier currently.
Employers of labour under the Contributory Pension Scheme (CPS) are having fewer troubles remitting their employees’ pensions to the Pension Fund Custodians (PFC’s) for their chosen Pension Fund Administrators (PFAs), following the investment in technology by industry operators.
This technology will not only ensure seamless pension collection by operators, it will also enhance compliance by employers who now have easy process of remittance and reconciliation.
The initial challenge where pension payments have been remitted without corresponding schedule; inconsistencies between remittance and actual posting; time lag before reconciliation and many more complaints would become things of the past.
The new development is part of efforts by Pension Operators Association of Nigeria (PenOp) to ensure a seamless process in pension remittance.
PenOp is an independent, non-governmental, non-political and non-profit making body established to promote the operations of the pension industry, provide for self-regulation and ensure that international best practices relating to the industry are observed by the operators registered in Nigeria.
Its role is to add value to its members across all levels; provide information, education, visibility, networking, while externally it is to increase the awareness and visibility of the pension industry and enable external stakeholders understand and participate in the development of this financial sub-sector wherever and whenever possible.
EPCCOS is a web-based e-payment collections platform, developed by NIBSS in partnership with PenOp. The portal was designed to facilitate the remittance of employees’ Pension Contribution to their various Pension Fund Administrators in an organized and timely manner.
Hitherto, these remittances were done manually with schedules distributed to the various PFAs and payments separately to the PFCs often with reconciliation issues. EPCCOS manages this entire process end-to-end with prompt notification to all parties namely the employers, the PFA and the PFC.
EPCOSS has greatly assisted employers to comply with the Pension Reform Act guideline stipulating that employers must remit employees’ Pension Contributions within 7 days of staff salary payments.
An employer who deducts pension contributions from employee salaries is under obligation to remit such contributions to a PFA chosen by the employee.
According to the Pension Reform Act (PRA) 2014, employers are legally bound to make contributions on behalf of their employees within 7 working days after the payment of salaries. The PRA 2014 also empowers PenCom, subject to the fiat of the Attorney General of the Federation, to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions of their employees within the stipulated time. Cases of unremitted pension contributions should therefore be brought to the notice of PenCom directly or through your Pension Fund Administrator (PFA).
A pension fund custodians said, EPCCOS is a major effort towards enhancement of pension collection. The platform should be embraced by employers of labour as the process of pension remittance has been made easy with the platform.
According to them, pension operators have increased its investment in the technology to make it end-to-end, stating that a lot of success have been made in making pension remittance easy for employers.
According to the Pension Reform Act (PRA) 2014, the minimum rate of pension contribution is 18 percent of monthly emoluments, where 8 percent is to be contributed by employees and 10 percent by employers. However, an employer may choose to bear the full responsibility of the scheme provided that in such a case, the employer’s contribution shall not be less than 18 percent of the employee’s monthly emoluments.
The key objectives of the scheme are to ensure that every person who has worked in either the public or private sector receives his retirement benefits as and when due; assist improvident individuals by ensuring that they save to cater for their livelihood during old age; establish a uniform set of rules and regulations for the administration and payment of retirement benefits in both the public and private sectors; and stem the growth of outstanding pension liabilities.
CPS is contributory, fully funded, based on individual accounts that are privately managed by Pension Fund Administrators with the pension funds assets held by Pension Fund Custodians.
