PenCom Puts FG’s Pension Liability for 2017 at N113,9233bn

• PenCom Puts FG’s Pension Liability for 2017 at N113,9233bn

The federal government’s pension liability for the year 2017, has been put at N113,023,255,000.00 billion, by the National Pension Commission (PenCom).

The Commission has also accused Ministries, Departments and Agencies of federal government of being reluctant in ensuring that contractors seeking government’s jobs comply with the law enunciated in the Public Procurement Act 2007 especially concerning their presentation of compliant certificate for contributory pension scheme and Group Life Insurance.

PenCom Director General, Chinelo Anohu Amazu, who stated this recently in her 2017 budget defence session before the senate Committee on Establishment and Public Service in Abuja, said breakdown of the above figure shows that government owes N72,702,581,000.00 to 16267 million civil servants that are to mandatorily retire in 2017, inclusive of 1,569 who retired before2017 but had not been provided for.

She said government is also owing N19,14,481,00.00 to 9,652 estimated dead workers as well as N21,171,193,000.00 to estimated employees yet to be enrolled by the commission by 2016.

Defending the above government’s indebtedness, Anohu- Amazu stated that pensioners have constitutional rights to periodic review of their benefits.

“Distinguished members of the senate Committee on Establishment and Public Service, may wish to note that employees of federal government Treasury Funded MDAs under the provision of Section 173 (3) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) have the right to pension review. Following the federal government’s approval and payment of 15% upward review of pension as a result of the salary review to pensioners under the defunct Defined Benefit (DB) Scheme, retirees under the Defined Contributory (DC) Scheme are also agitating for their rights under the Constitution” she added.

On the part of private sector, she expressed concern about employers who still shirk remitting their employees contributions as well as those who have not set up the scheme.

She expressed regret about the nonchalant attitude of government agencies which are supposed to help to ensure its compliance adding that this is why many seeking to obtain government contracts are not eager to comply.

According to statistics released by the commission, as at March 1, 2017, the commission had issued 2467 compliance certificates to firms that had embraced the Contributory Pension Scheme (CPS) to enable them bid for government’s contracts, just as some applications were rejected because they failed to meet statutory requirements.

According to the commission, with effect from January 2012, private sector employers that comply with the provisions of the PRA 2014 are issued annual Certificates of Compliance, and to qualify, employers are required to submit evidence of remitting contributions to the Retirement Savings Accounts (RSA) of their employees as well as show evidence of valid group life insurance policy.

PenCom in a presentation to the National Assembly, stressed that few contractors now seek the certificate due to the reluctance of MDAs to ensure contractors seeking government’s jobs complied with the law as enunciated in the Public Procurement Act 2007.

“All MDAs are required to demand for the Compliance Certificate as a requirement for transacting any business with a private sector organisation. Appropriate circulars have been issued to all MDAs in that regard.

“Also, the Commission monitors advertisements for contract by MDA to ensure that the pre-qualification criteria included evidence of compliance with the PRA 2014.

“The main reason for the low number of requests being the reluctance of MDAs to ensure that companies bidding for works have fulfilled their obligations relating to pensions as enunciated in the Public Procurement Act 2007,” it said.

The PenCom boss said that methods deployed by MDAs to avoid complying include: The exclusion of the pension requirement in the advertisement for contractors and/or acceptance of spurious evidence of compliance from the contractors.

She said that in a bid to address the lapses, the commission had agreed with the Bureau of Public Procurement (BPP) that henceforth, only Certificates it issued would be the valid evidence of compliance with the Public Procurement Act 2007.

“The Commission undertakes regular advertisement of the requirements for issuance of the certificate and ensure prompt issuance. In addition, the Commission now hosts the compliance status of companies on its website for easy scrutiny and verifications.

“The Commission has been working with the Financial Reporting Council (formerly Nigeria Accounting Standard Board), through a Joint Committee, to include report on compliance with the provisions of the PRA 2014 as part of the disclosure requirements in Audited Financial Statement of all organisations that employ a minimum of three staff,” PenCom said.