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Bimbola Oyesola
Employees have to take more interest in their retiree savings scheme (RSA) to avoid disappointment after retirement, says Trustfund Pension Administrator.
Speaking at a presentation on “Employers’ obligations under the Pension Reform Act 2014” last week in Lagos, the regional manager of the pension fund administrator, Obiora Ozoekwem, said employees must monitor employers to ensure that their contributions are being remitted as and when due.
He said, “Employees should have more interest in what is going on with their RSA. We’ve had a case where a retiree discovered after retirement that there was nothing in her RSA. All her savings went to her colleague who shared same name with her and, unfortunately, the person retired before her and had taken some of the money.”
He explained that it was later resolved, but advised that, while still in service, employees should make enquiries about their savings and equally know where they stand.
The Trustfund regional manager said it was also the duty of employers to ensure contribution into employees RSA, 10 per cent of employee’s monthly emolument by the employer and 8 per cent of monthly emolument by the employee.
“Those employers remitting only employees’ contributions and not theirs are culpable and will face penalty from PenCom,” he said.
Ozoekwem noted that though the issue of remittance was improving, as the number of employers under Trustfund has increased to 718,000 by December 2018, employers were still not remitting effectively, as most of the increase in remittances came from employers paying backlogs of contributions earlier deducted from the employees’ salaries.
He explained that every employer was expected to remit the deduction, not later than seven working days after which the employee’s salary is paid to the Pension Fund Custodian specified by the PFA of the employee.
“An employer who fails to deduct or remit the contributions within the stipulated timeline of seven working days from the day salary is paid is in breach of Section 11(3) of the act as stated in Section 11(6),” he said.
Ozoekwem said PenCom gets quarterly reports on employers not remitting and they shall be liable to make remittances already due and pay penalty of 2 per cent of the total contributions outstanding for each month or part of each month the default continues.
He stated that it was also unlawful for employers to force PFAs on their employees, though employers can call for a temporary PIN for an employee who has no RSA account after six months since such employee joined the establishment without RSA account.
On new rules that employees must comply with, the regional manager said all retirement account holders are expected to submit their National Identity Number (NIM) failing which the holder would not be able to receive payment at retirement.
On the progress involving registering informal workers in the scheme, the regional manager explained that the workers were already captured, but were yet to commence remittance.
