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PenCom to prosecute employers for N10.78bn pension default

By BusinessNews Staff on December 21, 2013

The National Pension Commission has expressed its readiness to begin the prosecution of employers who have refused to remit about N10.78bn pension funds deducted from their workers’ monthly emoluments into Retirement Savings Accounts under the Contributory Pension Scheme.

It said it would carry out the threat if the employers failed to refund the contributions with the accruing interests, which had accumulated as of the first quarter of this year.

According to PenCom, the figure was established by the agents employed by the commission to recover the contributions with interests.

This was contained in a report on the outstanding pension contributions and interest penalty from defaulting employers made available to our correspondent.

The report stated, “Seventy-five recovery agents established outstanding pension contributions and interest penalties amounting to N10.78bn against 424 private sector employers.

“The commission reviewed the claims submitted by the recovery agents and granted approval that 138 out of the 424 private sector employers be served demand notices for outstanding pension contributions and interest penalties that amounted to N4.28bn.”

It further stated that some of the employers, whose liabilities were established by the recovery agents, had remitted the outstanding pension contributions and interest penalties that cumulatively amounted to N225.99m.

In furtherance of its compliance efforts, the commission said it planned to begin the issuance of notice of intention to prosecute employers that failed to remit the outstanding pension contributions and interest penalties.

PenCom said it had applied various measures to ensure compliance with the provisions of the Pension Reform Act, 2004.

These, it added, included the application of sanctions and collaboration with key stakeholders on public enlightenment campaigns.

As part of the strategies to increase the level of compliance and awareness about the CPS, the commission said it had facilitated, organised and participated in series of workshops, seminars and interactive sessions.

PenCom said in furtherance of its compliance efforts, it had continued to collaborate with the Bureau of Public Procurement to ensure that organisations providing services to Ministries, Departments and Agencies of government complied with the provisions of the PRA 2004 as one of the preconditions for bidding for Federal Government contracts.

In the first quarter of 2013, the commission said 520 applications for compliance certificates were received, out of which 479 were processed and issued compliance certificates.

The remaining 41 applications, it added, were turned down due to incomplete documentation.

Also, PenCom said in its effort to encourage informal sector participation in the CPS, it developed and distributed the framework for participation in the CPS to all stakeholders for review.

It added that the inputs from the various stakeholders had been collated and subsequently incorporated into the framework.

Consequent upon this, the commission said it commenced work on the guidelines and other modalities that would facilitate the participation of the informal sector in the scheme.

“The commission’s efforts at increasing the level of compliance with the PRA 2004 and the marketing strategies of the Pension Fund Administrators continued to yield positive results as the total scheme membership increased,” PenCom noted.

[Punch]

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