40 broking firms, six underwriting coys get penCom's compliance certificates

Chuks Udo Okonta

Six insurance companies and 40 insurance broking firms were among the 74 companies that got the National Pension Commission (PenCom) certificate of compliance last year, Inspen has learnt.

The commission in a circular, said only 74 companies which include, Creed Insurance Brokers Limited, Leadway Assurance Plc, Lasaco Life Company and others were able to meet the requirement for issue of certificate of compliance as at January 4, this year.

The Pension Reform Act (PRA) 2004, made it compulsory for companies seeking government business to present certificate of compliance which indicates that they are meeting the regulation on staff pension contributions.

The PRA 2004 also mandates all employer with minimum of five staff to subscribe to the new pension scheme.

To ensure enforcement of the law, the commission recently issued an order that employers who fail to remitted their pension contributions would pay two per cent charge two weeks after deductions have been made by them.

PenCom noted that 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.

The commission said it would take legal actions on defaulters if violation persists, adding that 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 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 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."
It said 172 debt recovery agents have been engaged to collected unpaid contributions from employers, addinga that the agents have commenced work and that they consist of lawyers and accountants.

It 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.

PenCom said the balance 50 per cent would be paid to agent to defray the cost of recovery. It said 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.