…Issues several other directives
From Adanna Nnamani, Abuja
As part of efforts to boost compliance with the Contributory Pension Scheme (CPS), the National Pension Commission (PenCom) has directed all Licensed Pension Fund Operators (LPFOs) to cease doing business with vendors and service providers that do not remit pension contributions for their employees.
The directive, which targets both Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), mandates that only companies with valid Pension Clearance Certificates (PCC) issued by PenCom can be engaged for services or investment transactions.
The Commission, in a statement issued on Thursday, said the move aligns with Section 2 of the Pension Reform Act 2014, which compels all employers both public and private, to enroll in the CPS and remit pension contributions no later than seven working days after salary payments.
The Commission decried that, “Despite continuous engagement and enforcement measures, a significant number of employers remain non-compliant with this legal obligation. PenCom intensified its regulatory actions by appointing Recovery Agents (RAs) to audit defaulters, recover outstanding contributions, and enforce sanctions.”
It said the new directive would further strengthen enforcement, promote transparency, and expand pension coverage.
The Commission outlined several other compliance requirements for LPFOs, including: Investing only in companies and financial institutions that demand PCCs from their vendors and service providers; requiring counterparties to sign annual compliance attestations confirming PCC enforcement across their vendor networks and demanding PCCs from counterparties’ own vendors before approving any investment transactions, including those involving commercial papers, bonds, or bank placements.
It also mandated embedding these directives in their internal policies, vendor selection criteria, governance, and risk assessment frameworks as well as ensuring that LPFOs’ parent companies, subsidiaries, holding companies, and institutional shareholders also possess valid PCCs and enforce compliance across all vendor engagements.
PenCom provided a six-month transition period to enable all LPFOs and relevant stakeholders to fully comply with the new directive.