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PenCom recovers N3.4bn unremitted pension contributions from employers

By on October 2, 2014

As of August this year, National Pension Commission had recovered N3.4bn monthly pension contributions of workers, but which were not remitted by the employers to the employees Retirement Savings Accounts.

PenCom officials exclusively told our correspondent that the recovery agents employed by the commission successfully recovered the money from the defaulting employers.

The commission had recovered N3bn as of the end of the third quarter of 2013.

The commission engaged the recovery agents to go after employers, who were notorious for defaulting in the remittance of the monthly contributions of the workers to their respective Pension Fund Administrators as at when due.

According to PenCom, the employers were fined huge sums in addition to paying the outstanding contributions.

PenCom noted that it had employed different approaches to persuade the employers to embrace voluntary compliance with the provisions of the law regarding remittance of pension contributions through public enlightenments, media campaigns and collaboration with regulatory and professional bodies.

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

The Acting-Director General, PenCom, Mrs. Chinelo Anohu-Amazu, said the commission had earlier issued demand notices to errant employers, whose liabilities were established by the recovery agents, to remit the outstanding pension contributions and interest penalties into the RSAs of their employees.

“In line with this directive, some defaulting employers remitted outstanding pension contributions and interest penalties into the RSAs of their employees,” she said.

Anohu-Amazu said interest of about N183.61m was received from the remittances.

PenCom, she noted, scaled up its compliance and enforcement strategies in order to ensure adherence with the Pension Reform Act, 2014.

Consequently, she said, sanctions were applied in line with the compliance framework.

The regulator said that the commission had participated in public enlightenment programmes as well as collaborated with various stakeholders to ensure compliance with the law.

She said that the commission received applications for issuance of compliance certificates from private sector organisations, adding that while some were issued, others were turned down due to various inadequacies.

“These inadequacies included such issues as non-remittance of pension contributions for the appropriate period and non-provision of group life insurance policy for their employees,” she said.

Anohu-Amazu had canvassed more empowerment of the commission during the amendment of the PRA 2004, because sanctions provided under it were no longer sufficient deterrents against infractions of the law.

“The commission in its regulatory and enforcement activities, enhance the protection of pension fund assets, unlock the opportunities for the deployment of pension assets for national development, and review the sanctions regime to reflect current realities,” she said.

The amended PRA, 2014, however, reviewed some obsolete provisions in the law to beef up the regulatory powers of PenCom.

According to Anohu-Amazu, the total number of registered RSAs under the Contributory Pension Scheme rose from 1.67million to 2.78 million between 2006 and 2007.

From a figure of 5.9 million as of the end of 2013, she said the total number workers registered under the pension scheme stood at 6.12 million as of June this year.

 

[Punch]