The National Pension Commission (PenCom) has collected N7.79 billion from employers that defaulted in remitting pension contributions deducted from their employees’ Retirement Savings Account (RSAs).
The cash which is the total recoveries made from inception of the Contributory Pension Scheme (CPS) to date, represents two per cent interest of the amount deducted and not remitted by the employers as and when due.
Accordingly, total recoveries made from inception to date amounted to N16.01 billion, comprising principal contributions of N8.22 billion and penalty N7.79 billion.
The cash, according to a PenCom report titled: Second Quarter 2019: Update on the Recovery of Outstanding Pension Contributions and Interest Penalty from Defaulting Employers, has since been credited to the respective pension accounts (Retirement Savings Accounts) of the affected employees.
The Pension Reform Act (PRA) 2004 as repealed by the PRA 2014 states that an employer is under obligation to remit pension contributions to pension fund custodians within seven days after payment of salaries.
Otherwise, in addition to making the remittance, the employer shall be liable to a penalty which shall not be less than two per cent of the total contributions that remain unpaid for each month or part of each month that the default continues. According to PenCom, 37 employers paid N110 million penalty in the second quarter (Q2) of this year.
“The Commission maintained the services of Recovery Agents (RAs) for the recovery of outstanding pension contributions and penalty from defaulting employers. The RAs were mandated to review the pension records of the employers assigned by the Commission with a view to recovering outstanding pension contributions with penalty. During the quarter, demand notices were issued to 37 defaulting employers whose pension liabilities had been established by the RAs, which resulted in the remittance of outstanding pension contributions of N260.62 million, representing principal contributions of N151.59 million and penalty of N109.64 million.”
The Commission said it embarked on public awareness for the organised private sector in collaboration with Ministries, Departments and Agencies (MDAs).
“Further to the Commission’s strategy of driving compliance with the provisions of the PRA 2014 by employers through the conduct of public awareness programmes, the Commission has continued to organise sensitisation workshops on the CPS for employers’ associations/unions to enlighten and encourage them to key into the Scheme.
“The Commission in collaboration with the Nigeria Employers’ Consultative Association (NECA) conducted an interactive session on the current developments and challenges in the implementation of the Pension Reform Act 2014 for the organised private sector in Lagos, Port Harcourt, Abuja and Kano,” the report added.