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EFCC to prosecute firms not remitting pensions

By on August 31, 2016

The National Pension Commission on Tuesday said it was engaging the Economic and Financial Crimes Commission to prosecute individuals and companies that had yet to remit the pensions of their employees that were deducted at source.

It said the leaderships of both agencies had met to discuss the modalities on how those that had consistently violated the provisions of the Pension Reforms Act, particularly in the area of pension remittances, would be prosecuted.

The Head, Investment and Supervision, PenCom, Mr. Ehimeme Ohioma, confirmed the development during a presentation at the third quarter 2016 forum for finance journalists held in Abuja.

He noted that the prosecution of those that had defaulted would not be done in secret as they would be named and shamed in order to serve as a lesson to others that had failed to comply with the Pension Reforms Act.

He said already, the list of defaulters had been compiled by PenCom to enable the anti-graft agency to commence its investigations and prosecution.

While acknowledging that a lot of companies were finding it difficult to pay workers’ salaries and might not be able to remit pensions, he wondered why big quoted firms on the stock exchange that were declaring profits could not comply with the law.

Ohioma said that the commission had in a bid to recover the outstanding pensions appointed debt recovery agents but lamented that only N9bn had so far been recovered.

He said, “Recently, the Director-General of the commission (PenCom) met with the head of the EFCC and that enforcement and drive would be put into force shortly.

“You are aware that the commission also engaged private recovery agents to look into the books of companies and so far, about N9bn has been recovered from companies that deducted but did not remit. It’s an ongoing exercise.

“Some companies are not doing well and so they are not even paying salaries because it’s from salaries that we have deductions. So, we need to separate the issues from those companies that are not paying salaries and not remitting pensions as opposed to those that are still running. They’ve done deductions but have not remitted and that is the criminal part to it.”

“Deductions have been done but no remittances to the Retirement Savings Accounts of the contributors. We are taking these things in stages. We have engaged recovery agents; they’ve done some work, we are now going to the next stage of the people to prosecute.”

Ohioma also said since the commission could not prosecute, it had to seek the assistance of the law enforcement agents to do that, adding, “That was the reason for the recent engagement with the chairman of the EFCC and that will commence anytime shortly.

“We have the records; it will be publicly done because it’s a name and shame prosecution because you are denying people of their lifelong benefits and I assure you that will be done.”

Despite the fact that a lot of companies had yet to remit the deducted money from their workers’ salaries, he said the pension funds asset had grown to about N5.8tn.

Ohioma said with the pension fund being one of the largest pools of savings in Nigeria, there was a need for the country to take advantage of it by channelling the funds into infrastructure.

He said the commission was mindful of this, noting that this was why it came out with the recent guideline that up to 20 per cent of pension funds assets could be invested in infrastructure through instruments issued on the stock exchange.

He, however, lamented that the country had yet to take advantage of the pension funds as only three per cent of the N5.8tn fund was invested in infrastructure instruments.

Ohioma said with the huge infrastructure deficit facing the country, the strategic target of PenCom was to ensure that up to 40 per cent of the fund would be invested in infrastructure by 2019

He listed some of the challenges affecting the investment of pension fund in infrastructure as political risks, policy inconsistency, lack of continuity, liquidity risks and limited number of investible products.

He said, “Investment in infrastructure gives the highest returns because everyone uses infrastructure and so the pension fund is a serious source of investment in infrastructure because we have a huge infrastructure deficit.”

On the progress so far made with the multi-fund investment capital, he said the commission was awaiting the approval of the President Muhammadu Buhari to commence its implementation.