19 Employers paid N170 million Penalty for late Remittance of Pension Contribution – PensionNigeria

19 Employers paid N170 million Penalty for late Remittance of Pension Contribution

The National Pension Commission (PenCom) has disclosed in its quarterly report for 4th quarter 2020 that N170,571,490.36 was recovered from 19 defaulting employers during the 4th quarter of 2020.

PenCom said following the issuance of demand notices to defaulting employers whose pension liabilities had been established by the Recovery Agents (RAs), the sum of N553,033,652.01, representing principal contribution of N382,462,161.65 and penalties of N170,571,490.36 were recovered from 19 defaulting employers during the quarter under review.

Recovery Agents

A recovery agent is any company engaged by PenCom to recover outstanding pension contributions with interest penalty from defaulting employers within a specified timeframe and under agreed terms and conditions.

Defaulting Employer

A defaulting employer is an employer who has defaulted in the remittance of pension contributions either for non remittance, incomplete remittance or late remittance.

Non remittance

Where an employer fails to deduct and or fails to remit pension contributions for its employees.

Incomplete Remittance

The percentage for the pension contribution is a minimum of 8% by employee and minimum of 10% by employer, the percentages are to be applied to the employee’s monthly emolument which must not be lower than the employee Basic salary, transport and housing allowance.

Late Remittance

Employers are required to deduct at source the pension contributions of their employees, and within 7 working days after the payment of salary, remit same to the Pension Fund Custodian (PFC) of the employees’ Pension Fund Administrator (PFA).

Penalty

An employer who fails to deduct or remit pension contributions within 7 working days after payment of salary, shall, in addition to making the remittance already due, be liable to a penalty to be stipulated by PenCom from time to time but the penalty shall not be less than 2% of the total contribution that remains unpaid for each month or part of each month the default continues and the amount of the penalty shall be recoverable as a debt owed to the employee’s retirement savings account.

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