The National Pension Commission (PenCom) has made great progress in ensuring that employers comply with pension contribution regulations.
From 2012 to 2023, PenCom has successfully recovered a total of N25.45 billion in unremitted pension contributions from employers who were not following the rules.
This amount includes N12.93 billion in principal contributions and N12.52 billion in penalties over an 11-year period.
Mr. Ibrahim Buwai, the Director of Corporate Communications at PenCom, shared this information during the Finance Correspondents Association of Nigeria (FICAN) Annual General Meeting held over the weekend.
Buwai emphasized the significance of the Pension Reforms Act, which requires penalties for delayed payments, with interest accumulating at a rate of 2% per month.
He stressed the almost equal split between the recovered principal contributions and penalties, highlighting the thorough measures taken to ensure adherence.
The PenCom director said: “From the inception of these recovery agents’ programmes in 2012 to December 31, 2023, the principal contributions that were recovered were about N12.9 billion while the penalty was about N12.5 billion.
“So, you can see that it’s almost 50-50. All this is what has been recovered from employers and paid into RSAs.
“The good thing is that all this penalty and principal goes into the individual RSA account.
“Nobody takes a penny, not PFAs, not PenCom, nobody. All these money recovered were for RSA holders and it goes into RSA.
“What you can help us by way of employers is that it is not in their interests not to remit because it is cheaper to remit than not to remit.”
PenCom is facing challenges in its efforts to recover funds. Buwai identified two main problems: employers not sending in pension contributions and remittances lacking proper schedules for Pension Fund Custodians (PFCs), making it difficult to allocate funds to RSA holders.
To address these issues, PenCom has taken proactive steps such as publishing a list of uncredited remittances and encouraging all parties involved to comply with regulations.
Buwai said: “We have the issue of employers not remitting. The second issue is that employers remitted but if there is no company schedule that shows the employers that these monies belong to Pension Fund Custodians (PFCs), they cannot apportion to RSA holders.
“We are not happy and that is why in 2023, we put out a statement on it and on our website, we have a long list of remittances that we saw were uncredited, calling on the people concerned to come forward and make sure the remittances are done.”
PenCom reaffirmed its dedication to ensuring the safety of pension funds. Buwai guaranteed that the regulatory body enforces strict guidelines to protect pension assets. These guidelines are carefully crafted to shield pension funds from any possible investment risks.
He said: ”We are not wavering, we have not made it lax or easy. All those stringent guidelines that were thoroughly outlined so that pension funds might be protected in the event that these investment instruments might be available – those stringent requirements remain.
“All we know is that if the pension funds are available, pension funds managers will review and take their decisions.
“I have to also clarify that PenCom does not partake in investment issues on the pension funds.
“All we do as regulators is that we set out general guidelines as contained in our investment regulations.”
PenCom’s diligent efforts to recover unremitted pension contributions demonstrate its strong commitment to safeguarding employees’ retirement savings and ensuring that employers comply with regulatory obligations.
