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Employers fail to remit 130,000 workers’ pension contributions

By on September 25, 2014

The pension contributions of about 130,000 workers registered under the Contributory Pension Scheme are not remitted monthly to their respective Retirement Savings Accounts by their employers, investigation has revealed.

Latest figures on the quarterly RSA registration, which were obtained by our correspondent from the National Pension Commission, show that the number of registered workers rose from 5.04 million in the first quarter of 2012 to 6.12 million in the second quarter of 2014.

According to PenCom, 4.9 million remittances went into the workers’ RSAs by employers on the average in first quarter of 2012, while 6.02 million remittances were made in second quarter of 2014.

The commission said on the average, the accounts of 130,000 workers were not being funded by their employers.

PenCom disclosed that the number of RSAs grew to 5.16 million, 5.27 million and 5.39 million in the second, third and fourth quarters of 2012, while only the contributions of 5.04 million, 5.16 million and 5.27 million employees were remitted to the accounts during the periods under review.

According to the commission, 5.51 million, 5.6 million and 5.82 million RSAs existed in the first, second and third quarters of 2013, while pension contributions were credited to only 5.39 million, 5.51 million and 5.65 million accounts during the periods.

In the fourth quarter of 2013, 5.91 million RSAs existed, while the figure moved to 6.02 million in the first quarter of 2014. However, only 5.78 million and 5.92 million of the accounts were funded during the periods.

While the average of 55.5 million RSAs were created during the 16-month period, only 54.2 million workers got their contributions remitted to their RSAs, meaning that on the average, 130,000 workers’ accounts were not being funded on a monthly basis.

As of the end of last year, PenCom said it had successfully recovered N3.33bn from employers, who had been deducting monthly pension contributions from their workers’ salaries without remitting same to their RSAs.

The commission had to employ the services of recovery agents in 2012 after the Pension Fund Administrators established that at least 15,427 employers failed to remit pension contributions to their workers’ individual RSAs between January 2010 and December 2011.

The commission had sent the recovery agents to the defaulting employers to retrieve all outstanding contributions along with the interest penalty.

PenCom had earlier selected the recovery agents in line with Section 11(7) of the Pension Reform Act, 2004.

The agents, who commenced the recovery exercise in January last year, the commission said, were experts at forcing money out of defaulters.

It stated that it had employed different approaches to encourage the concerned employers to embrace voluntary compliance such as public enlightenment, media campaign and collaboration with regulatory and professional bodies.

Other means employed, PenCom added, included engagement of consultants, disclosure requirement, issuance of compliance letters, financial literacy and enforcement.

 

 

[Punch]

2 Comments

  1. Chin Geo

    December 17, 2016 at 9:18 pm

    You are right Most of all the outsource company such Global manpower Ltd, and Lighting Network Ltd

  2. Chin Geo

    December 17, 2016 at 9:20 pm

    You are right Most of all the outsource company such Global manpower Ltd, and Lighting Network Ltd, they do not pay even tax.