Chuks Udo Okonta
Unremitted pension contributions would henceforth attract two per cent charge two weeks after deductions are made by employers and be paid to Retirement Savings Account (RSA) holders, the National Pension Commission (PenCom) has said.
The commission in a circular entitled: Regime of Sanctions and Penalties for Non-Compliance with Pension Reform Act of 2004, said employers are to remit employees contributions not later than seven working days from the day salary is paid. It noted that if default persist after three months, one per cent of the outstanding would be paid to the commission.
PenCom noted that it would take legal actions on defaulters if violation persists, it added employers who refused to give access to information about their staff would pay a fine not more that N200,000 and that every false or misleading information would attract N100,000 fine, each day the offence continues.
It said any employer who coerce employees to open RSA with Pension Fund Administrator (PFA) that is not their choice, would pay N1,000 after three months per employee for every month of violation.
The Commission also called for the provision of stiffer penalties against employers who persistently fail to deduct or remit pension contributions within stipulated time.
Inspen gathered that the commission wants fait of Attorney General of the Federation, to enable it institutes criminal proceedings against employers for persistent refusal to remit pension contributions
PenCom called for the amendment of Section 11(7) of the Pension Reform Act (PRA) 2004, stressing that the present provision is clogged with limitations.
It said: "Power to Institute Criminal Proceedings against Employers for Persistent Refusal to Remit Pension Contributions: Section 11(7) should be amended to empower the Commission to institute criminal proceedings, with fait of Attorney General of the Federation, against employers who persistently fail to deduct and/or remit pension contributions within the stipulated time.
"Review of the Penalties and Sanctions: The sanctions currently provided under Section 85 are no longer sufficient deterrents against infractions of the PRA 2004. Consequently, Section 85 should be amended to provide for stiffer penalties that will serve as deterrents."
Its Director General PenCom Mohammad Ahmad, said 172 debt recovery agents have been engaged to collected unpaid contributions from employers.
He said the agents have commenced work, adding that the agents who consist of lawyers and accountants would ensure that employers comply with laws on remittance of their workers contributions.
He noted that 50 per cent of the interest penalty from outstanding contributions recovered through the efforts of agents will be given to employees with RSA, while the balance 50 per cent would be use to settle the agents.
Ahmad said the balance 50 per cent would be paid to agent to defray the cost of recovery. He noted that PFAs would not be allowed to charge administration fee on retirement savings accounts that benefited from the recovery in the arrears or in retrospect.
He noted that each agent’s performance would be monitored based on set performance standards which would be documented in a Service Level Agreement (SLA) to be executed with the recovery agents. He said recovery agents would be required to submit monthly progress report with respect to recoveries from employers assigned to them, adding the reports would be reviewed to determine if the performance of the agent is satisfactory or otherwise.
He said: "The Commission would hold quarterly meeting with the recovery agents and PFAs to discuss remuneration of recovery agents would be performance based. The remuneration would be met from the interest penalty charged on the outstanding contributions recovered through the efforts of the agents and administration fees charged by PFAs. In that regard, 50 per cent of the interest penalty would be used to defray the cost of recovery while the balance of 50 per cent would be for the benefit of the RSA holder. In addition, PFAs would not be allowed to charge administration fee on RSAs that benefited from the recovery in the arrears or in retrospect.
"Recovery Agents would be required to submit monthly progress report with respect to recoveries from employers assigned to them. The reports would be reviewed to determine if the performance of the agent is satisfactory or otherwise. Challenges encountered and ways forward. The compliance and enforcement department would be responsible for the implementation of the framework in conjunction with other relevant departments in the commission.
"The Commission would provide a secretariat and basic resources such as telephone and internet access for use of the recovery agents. The secretariat would be located in the Commission office. The framework is subject to a periodic review to ensure speedy recovery of un-remitted pension contributions by employers."
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