The following are the strategies adopted by the National Pension Commission (PenCom) to ensure employers remit employees pension contributions.
The strategies are;
- Appointment of Recovery Agents
- Issuance of Pension Clearance Certificates
- Compliance Monitoring through onsite inspection of employers
- Public Awareness and Engagement
- Collaboration with social partners and relevant stakeholders.
Appointment of Recovery Agents
To ensure compliance by employers of labour with respect to remittance of pension contributions, the Commission developed a Framework for Recovery of Outstanding Pension Contributions with Penalty from defaulting employers. Based on the Framework, the Commission had engaged recovery agents for the review of the pension records of employers and recovery of unremitted pension contributions plus penalty. The recovery exercise which has been largely successful, has boosted the confidence of contributors and by extension encouraged non-participating employees/employers to embrace the Scheme. Through this initiative, the sum of N16.37 billion representing principal contribution (N8.37 billion) and penalty (N8.00 billion) have been recovered from defaulting employers. Both the principal contributions and penalty have been credited into the workers’ Retirement Savings Accounts (RSAs). The penalty is meant to compensate for the income that would have been earned if the contributions were remitted as and when due. The commission is also prosecuting recalcitrant employers who failed to remit its employees’ pension contribution into their RSAs.
Issuance of Pension Clearance Certificates
The Commission commenced the issuance of Pension Clearance Certificates to organizations in 2012. The certificates are renewable annually and serve as a confirmation of compliance with the provisions of the PRA 2014 by an employer. The Certificate is one of the key requirements for doing business with Federal Government Ministries, Departments and Agencies (MDAs). From January to September 2019, the Commission has received applications from 17,400 organizations out of which 16,603 organizations were issued certificates. The 16,603 organizations that were issued certificates remitted the sum of N89.45 billion into the RSAs of 272,974 employees. The Commission has a transparent, efficient and effective process that ensures timely issuance of Certificates to qualified applicants. The Commission is on the verge of automating the process of issuing Pension Clearance Certificate.
Compliance Monitoring through onsite inspection of employers
The Commission has continued to monitor compliance with the PRA 2014 by private sector employers through the Risk Management and Analysis System (RMAS) as well as through complaints received from employees. Defaulting employers are engaged in line with the Regime of Sanctions and On-site Inspection by the Commission. The engagements are aimed at ensuring that employees opened RSAs and pension contributions (plus penalty) are remitted into the RSAs. In that regard, the Commission had engaged 1,490 private sector employers. These efforts have proven very useful in ensuring private sector compliance with the PRA 2014 as most of the affected organizations have provided evidences of remitting pension contributions to their employees’ RSAs.
Public Awareness and Engagement
The commission has continued to engage in sensitization workshops on the workings of the CPS for the Organized Private Sectors. In this regard, several interactive sessions on the Scheme have been held with the private sector employers. The sessions have been very useful in providing a platform for the Commission to enlighten private sector, address their concerns/fears and obtain useful feedback that would improve compliance.
Collaboration with Social Partners and Relevant Stakeholders
The commission has been engaging and collaborating with Social Partners like the Nigeria Employers’ Consultative Association (NECA), Nigeria Labour Congress (NLC), Trade Union Congress (TUC), Nigerian Union of Pensioners etc. The interactive sessions, provides the platforms for the Commission to interact with critical stakeholders in the Organised Private Sector OPS on the implementation of the Scheme. Also, the sessions provide opportunity for the Commission to keep stakeholders abreast of developments, address concerns, clarify issues and discuss the expectations of contributors, with a view to improving compliance with the provisions of the PRA 2014. The interactions further allay the fears of contributors about the Scheme. In addition, the commission obtained useful feedbacks from the OPS on the implementation of the CPS through the sessions.
Your Employer is Not Remitting?
If your employer is not remitting your pension contributions and or they dont have group life insurance for their employees, please do not hesitate to report the employer to the National Pension Commission.
You can also report anonymously.
To report, you are advised to send a letter of complain to PenCom stating the name and address of the employer and the months outstanding to enable PenCom send recovery agents to go after the employer.
You can drop the letter at or send the letter to any PenCom office closet to you. List of all PenCom offices are available here