- Employers Pay N5.2bn Fine for Not Remitting Workers’ Pension Contributions
Some employers of labour have paid N5.2bn as fines for their failure to remit the pension deductions of their workers under the Contributory Pension Scheme into their respective Retirement Savings Accounts with their Pension Fund Administrators, investigation has revealed.
According to a report on unremitted pension funds obtained by our correspondent, the National Pension Commission also recovered N6.2bn unremitted pension contributions from the concerned employers.
“A total of N11.41bn pension contributions was recovered from defaulting employers from inception to date, which is made up of N6.21bn actual pension contributions and N5.20bn penalty,” PenCom stated.
Some years back, when the regulator discovered that several thousands of employers were not funding their workers’ RSAs, it employed the services of recovery agents.
The recovery agents were asked to go after the defaulting employers to retrieve all outstanding contributions along with the interest penalty.
The Pension Reform Act, which established the Contributory Pension Scheme, was enacted to ensure the payment of retirement benefits to employees in both the public and private sectors.
Under the law, every employee is mandated to open a RSA in his name with any PFA of his choice and notify his employer of it.
Employers, according to the law, are required to deduct eight per cent of the worker’s monthly remuneration and add another 10 per cent, making a total of 18 per cent, which should be paid into the employee’s RSA not later than seven days after salaries are paid.
PenCom said that following the issuance of demand notices to defaulting employers, whose liabilities had been established by the consultants, some of them had been remitting the outstanding pension contributions and penalties.
The commission said it maintained the services of the consultants to follow up and recover the outstanding pension contributions with penalties from the defaulting employers.
PenCom said it continued to apply various strategies to ensure compliance with the provisions of the PRA 2014, which included the applications of sanctions and collaboration with key stakeholders on public enlightenment campaigns.
“Similarly, the agents employed by the commission have continued to recover outstanding pension contributions with interest penalties from all errant eligible employers,” it stated.
The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said the CPS was established to deliver better pensions to retirees.
“The Federal Government took a remarkable step in changing the pension landscape through the enactment of the Pension Reform Act,” she said.