The National Pension Commission (PenCom), via the activities of Recovery Agents, has recovered N17,519,053,461.59 (principal contribution of N8,890,148,579.90 and penalty of N8,628,904,882.19) from defaulting employers who did not remit their employees pension contributions as at when due, from inception of the exercise in 2012 to 30 June 2020.
PenCom report disclosed that out of the N17.5 billion, N665,591,865.26 (principal contribution of N332,980,256.94 and penalty of N332,611,608.32) was recovered from 51 defaulting employers from January to June 2020, while N1,487,515,986.14 was recovered in 2019 and N15,365,945,610.19 was recovered from 2012 to 2018.
PenCom engages the services of Recovery Agents (RAs) for the recovery of outstanding pension contributions and penalties from defaulting employers. The RAs are required to review the pension records of the employers assigned to them by PenCom and recover outstanding pension contributions with penalties.
The amounts are recovered following the issuance of demand notices to defaulting employers whose outstanding pension contribution liabilities had been established by the RAs. The amounts recovered had since been credited to the respective Retirement Savings Accounts (RSAs) of the employees.
PenCom also noted that the list of defaulting employers that failed to remit outstanding pension contributions and penalty as established by the RAs have been forwarded for legal actions and PenCom continues to record successes with respect to matters at the courts as many employers had requested for out of court settlements.
In compliance with the provisions of Pension Reform Act 2014, employees are required to contribute a minimum of 8% while employers must contribute a minimum of 10%, of the employees’ monthly emoluments as pension contributions for the employees.
Employers are subsequently, mandated to deduct at source the monthly pension contributions of the employee, and, not later than 7 working days from the day the employee is paid his salary, remit an amount comprising the employee’s contribution and the employer’s contribution to the Pension Fund Custodian specified by the Pension Fund Administrator of the employee.
Any employer who fails to deduct or remit pension contributions as stipulated in PRA 2014, shall, in addition to making the remittance already due, be liable to a penalty of not less than 2 percent 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.
Sadly, the power to report defaulting employers primarily lies with the employees working in such organisation who are mostly scared of victimisation or loss of job. Employees working in such organisations are required to report their employers to PenCom, and going by PenCom publication, such employees can write a letter to PenCom or send an email to PenCom.
The letter to PenCom is hardly acknowledged and the email is either full or never responded to. This is an ineffective process to report defaulting employers, PenCom needs to establish a more transparent, trackable and convenient process for employees to report defaulting employers. It’s advisable that PenCom should have a link on its website where employees can report defaulting employers anonymously or with their full details, such a link should also be available on all Pension Fund Administrators (PFAs) websites and employees of defaulting employers should get feedback from PenCom on the status of their complaints in this regard.
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