PenCom fines private employers N1bn

The National Pension Commission has recovered N3.94bn pension contributions that private employers failed to remit to their workers’ Retirement Savings Accounts and fined the firms N1.04bn for the default, investigation has revealed.

The figures were contained in a report on the recovery of outstanding pension contributions and interest penalty for the defaulting employers obtained by our correspondent from the commission.

“At the end of the third quarter of 2014, the total cumulative recoveries made rose to N4.98bn, comprising principal contributions of N3.94bn and penalty of N1.04bn,” PenCom stated.

The commission said it issued demand notices to the defaulting employers whose pension liabilities were established by its appointed recovery agents.

PenCom added that during the third quarter of last year, the recovery agents recovered the sum of N884.83m, representing principal contributions and penalty.

It also said letters of warning were issued to 255 employers that failed to remit outstanding pension contributions and pay the penalties that were established by the recovery agents.

The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said the commission scaled up its enforcement strategies in order to enhance compliance with the provisions of the Pension Reform Act, 2014.

“Consequently, sanctions were applied in line with the compliance framework. In addition, the commission participated in public enlightenment programmes as well as collaborated with various stakeholders to enhance compliance,” Anohu-Amazu said

In 2012, PenCom employed recovery agents to compel the defaulting organisations to cough up the outstanding contributions of their employees with interest.

The commission gave the agents the mandate to recover the unremitted contributions together with interest from the defaulting organisations.

PenCom noted that it had employed different approaches like public enlightenment, media campaign and collaboration with the regulatory and professional bodies to entice the employers to embrace voluntary compliance with the provisions of the Contributory Pension Scheme.

Other means employed include engagement of consultants, disclosure requirement, issuance of compliance letters, financial literacy and enforcement.

The commission stated that 24 states had dropped the Pay-As-You-Go pension scheme and the CPS. Records on implementation by the state governments showed that the number of states that had enacted laws on the CPS was 24 as of the second quarter of 2014.

According to the commission, 12 other states are at various stages of implementing the scheme, while one state has yet to commence the process.

Lagos State, which was the first to drop the old pension scheme for the CPS, is already in the process of amending its Pension Reform Law, 2007, following the promulgation of the National Pension Reform Act, 2014.