Twenty employers who failed to remit pension contributions as at when due have paid N211.46 million as penalties as at second quarter (Q2) of the year, The Nation has learnt.
Besides, seven recalcitrant employers are to be dragged to court.
This is the fallout of the National Pension Commission’s (PenCom’s) effort on recovery of outstanding pension contributions and penalties from defaulting employers.
According to the Pension Reform Act (PRA) 2014, employers are obliged by law to deduct and remit pension contributions into the employee’s RSA not later than seven working days after salaries are paid.
When an employer fails to remit its employees’ pension contributions, PenCom would mandate such an employer to make the remittance already due, in addition to paying penalty, which would be at least two per cent of the unpaid contributions.
Both the outstanding contribution and penalty would be paid into the employees’ Retirement Savings Account (RSAs).
The penalty is meant to compensate employees for the income that would have been earned if their pension contributions were remitted promptly.
The Director-General, PenCom, Mrs. Aisha Dahir-Umar, said the Commission, through its Recovery Agents, issued demand notices to 20 defaulters.
She stated that as a result, N721.12 million, comprising N517.65 million principal contributions and N211.46 million penalties, was recovered from the 20 defaulting employers.
She said: “PenCom is preparing to take legal action against seven recalcitrant employers after exhausting administrative measures to ensure compliance.”
Meanwhile, the Commission has issued 10,085 Pension Clearance Certificates to private sector organisations out of the 12,760 applications submitted.
Mrs. Dahir-Umar said the remaining 2,675 applications were being processed at the end of the quarter.
On payment of retirement and terminal benefits, she said: “PenCom approved 5,460 requests from retirees to draw pension through Programmed Withdrawal (PW) in the second quarter of 2022.
“Accordingly, the retirees received lump-sum payments totaling N26.32 billion, while their total monthly pensions amounted to N353.40 million.
“Similarly, PenCom approved the lump-sum payments of N10.32 billion to 2,817 retirees that chose Retiree Life Annuity. Furthermore, N20.64 billion was paid to Retiree Life Annuity providers as premiums regarding monthly and quarterly annuities of N212.69 million. Death benefits paid in second quarter of 2022 amounted to N12.32 billion.”
Giving update on RSA transfer, she said a total of 14,821 RSA holders successfully transferred their accounts with their associated pension assets to new Pension Fund Administrators (PFAs) in the second quarter of 2022.
“Through effective regulation and supervision, the Contributory Pension Scheme (PS) has remained strong and resilient. PenCom, hereby, reiterates its commitment to ensure that retirement benefits are paid as and when due,” she added.