Employers remit N3.10bn pension contributions amidst sanction threats

　

The number of employers remitting the monthly pension contributions to their workers’ Retirement Savings Accounts has noticeably increased lately due to some measures taken by the National Pension Commission, NIKE POPOOLA writes

Though many employers of labour have registered their workforce under the Contributory Pension Scheme, not all of them are remitting the monthly pension deductions from the workers’ salaries to their Retirement Savings Account, according to the National Pension Commission.

The Pension Reform Act, 2004 mandates employers with at least five workers to subscribe to the Contributory Pension Scheme.

It also states that the employer and employee must contribute 7.5 per cent of monthly emolument each into the worker’s RSA in the custody of a Pension Fund Administrator monthly.

PenCom said it had employed various measures to compel errant employers to comply with the law, with the objective of securing the financial future of the workers in retirement.

According to the latest figures on compliance and enforcement activities, the commission said it received 218 applications for the issuance of compliance certificates, out of which 175 were approved and the certificates issued.

Following the issuance of the certificates, PenCom stated that a total of N3.10bn was remitted by the employers to the RSAs of 56,311 employees.

It stated that employers, whose requests were rejected, were issued letters advising them to ensure full compliance with the law.

According to the reports on sanctions, PenCom issued caution letters to 487 organisations for failing to comply with the provisions of the PRA, 2004.

Monetary penalties, it added, were imposed on some organisations, while it had been following up to ensure that the organisations complied with the Act.

PenCom said it had recovered some outstanding pension contributions and interest penalty from employers under the scheme.

It said after engagement and subsequent execution of the service level agreement with recovery agents, it was now receiving progress reports from some of the agents on their recoveries.

The recovery agents were engaged to go after defaulting employers and make them to remit workers’ monthly contributions that they had held unto with interest.

The Chief Executive Officer, Stanbic IBTC Pension Managers, Dr. Demola Sogunle, said employees, whose monthly deductions were not remitted to the workers’ PFAs could be proactive by reporting their employers to PenCom.

He said, "This can be done through letters or email. In addition, the PFAs go the extra mile to report employers who have stopped remitting monthly pensions on behalf of their workers to the commission on a regular basis," adding that in recent times, PenCom had employed the services of recovery agents.

Sogunle explained that the duties of the agents included enforcing the CPS law on defaulting employers by ensuring that remittances were made to the PFAs on behalf of the employees.

The pension operator said the CPS was relevant for both the employer and the employee.

He noted that the most important factors for employers to consider when joining the scheme were transparency, portability and safety.

With regards to the transparency of the scheme, Sogunle said customers under the CPS had access to their RSAs and could also monitor the contributions and growth of their pensions during the period of their active years in service.

The Managing Director, Pensions Alliance Limited, Mr. Dave Uduanu, said it was necessary for the workers to prepare for a smooth and comfortable retirement period through the CPS.

While speaking on the non-compliance by many companies, he said access to pension was a right of every working Nigerian.

He explained that the CPS was a statutory law by the government and that it was an offence for companies not to comply with its provisions.

"When companies comply, their workers have something to look forward to, and this will be a motivating factor for employees," Uduanu said.

The Chief Executive Officer, Leadway Pensure PFA, Mrs. Aderonke Adedeji, said there was a lot of apathy about the CPS in the private sector.

She, however, said things would improve as people became more aware of the benefits, their rights and the successes so far achieved under the CPS.

"Some employers hide under the guise of contract employment and imply that such workers are not entitled to pension contributions. This is not true as the Act does not make any such differentiation in the terms of employment," Adedeji said.

She noted that the Act did not mandate the state governments to adopt it but that adoption of the scheme by them had been at different levels of compliance.

The Leadway Pensure boss urged the state governments and employers in the private sector to embrace the CPS as it had advantages for both the employer and employee.

Source: Punch