PenCom slams N10m fine on PFAs, PFCs over unprotected funds

Chuks Udo Okonta

A fine of not less than N10 million will henceforth be paid by Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) for failure to protect the funds under their management, Inspen has learnt.

In a circular entitled: Revised Regime of Sanctions and Penalties for Non-Compliance with the Provisions of the Pension Reform Act 2004, released by the commission recently, it said in line with Sect. 58 (3), external auditors of PFAs or PFCs shall have responsibility to it for the protection of pension funds, adding that one month upon discovery that the pension fund is not well protected, a letter of advice will be written to an operator to correct the anomaly.

PenCom noted that two weeks after the letter of advice, nothing is done, a letter of caution, will be issued. Thereafter a letter of warning, and if the firm refuses to take action, a fine not less than 10,000,000 will be  slammed on the firm as monetary penalty.

It noted that if violation continue after monetary penalty, it will preceed to naming and shaming and if the firm failed to heed, imprisonment of a term not less than three years, will be imposed on the responsible partner or principal officer.

PenCom said in line with remittance of contribution as stated in Sect.

11(5B), Sect. 11(7), employers should remit employees’ contributions not later than seven working days from the day salary is paid.

It noted that two weeks after default, payment of not less than two per cent of unpaid contribution should be paid to Retirement Savings Account (RSA) holder(s), stressing that continuous default for one month after issuance of letter of advice, a letter of caution will be issued to the erring employer.

It said after one month of failure to adhere to the Letter of caution, a letter of warning, will follow and thereafter, one per cent of the outstanding payable will be paid as monetary penalty if the default persists after three month.

It said continuous violation after monetary penalty, will attract naming and shaming and thereafter legal action if violation persists.