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The National Pension Commission (PenCom) has recovered a total of N7.79 billion from employers who failed in remitting pension contributions deducted from their employees’ Retirement Savings Account (RSAs).
According to a report from the Commission, the cash which is the total recoveries made from commencement of the Contributory Pension Scheme (CPS) till date, represents two per cent interest of the amount subtracted and not remitted by the employers as at when due.
The total recoveries made from inception to date equals to N16.0 billion, including principal contributions of N8.22 billion and penalty N7.79 billion.
The PenCom second quarter 2019 report, ‘Update on the recovery of outstanding pension contributions and interest penalty from defaulting employers’, stated that the funds recovered has since been credited to RSAs of the affected employees.
The Pension Reform Act (PRA) 2004 states that an employer is under obligation to remit pension contributions to pension fund custodians within seven days after payment of salaries. Otherwise, in addition to making the remittance, the employer shall be liable to a penalty which shall not be less than two per cent of the total contributions that is left unpaid for each month or part of each month where the default continues.
PenCom further disclosed that, 37 employers paid N110 million penalty in the second quarter of this year.
The report also stated that, “the PenCom maintained the services of Recovery Agents (RAs) for the recovery of outstanding pension contributions and penalty from defaulting employers. The RAs were authorized to review the pension records of the employers assigned by the commission with a view to recovering outstanding pension contributions with penalty. During the quarter, demand notices were issued to 37 defaulting employers whose pension liabilities had been established by the RAs, this resulted to the remittance of outstanding pension contributions of N260.6 million, representing principal contributions of N151.5 million and penalty of N109.6 million.”
“In addition to the commission’s strategy of driving compliance with the provisions of the PRA 2014 by employers through the conduct of public awareness programmes, the commission has continued to organise sensitisation workshops on the CPS for employers’ associations/unions to enlighten and encourage them to key into the scheme.
“The commission in collaboration with the Nigeria Employers’ Consultative Association (NECA) conducted an interactive session on the current developments and challenges in the implementation of the Pension Reform Act 2014 for the organised private sector in Lagos, Port Harcourt, Abuja and Kano,” the report noted.
