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  • PenCom comes top in ethics, integrity

    PenCom comes top in ethics, integrity

    National Pension Commission (PenCom) has come top in 2023 Ethics and Integrity Compliance Scorecard (EICS) among 50 regulatory agencies.

    In a  statement, it said the assessment was done by Independent Corrupt Practices and Other Related Offences Commission (ICPC).

    PenCom also became 14th of 404 Ministries, Departments, and Agencies (MDAs) on the comprehensive scorecard.

    It achieved a commendable score, described by ICPC as substantial compliance.

    The statement reads: “In recognition of this achievement, ICPC conveyed its commendation to PenCom, acknowledging its commitment to ethics and integrity.

    Read Also: PenCom secures top position among 50 regulatory agencies

    “ICPC commended PenCom for its well-established structures and processes that promote efficiency, while encouraging management to maintain high service delivery.

    “The annual deployment of the Ethics and Integrity Compliance Scorecard by ICPC aims to assess MDAs’ compliance with ethical, integrity, statutory, policy, and regulatory standards and practices.

    “This initiative aligns with its preventive mandate. The scorecard aims to minimise corruption, prevent abuse, and revitalise ethics and integrity in MDAs…’’

    The overarching objective is to ensure good service delivery while promoting a culture of ethical conduct within public service institutions.”

    The management assures that PenCom remains committed to sustaining the well-acknowledged transparency in regulating the Nigerian pension industry for the benefit of pension contributors and retirees. This continues to manifest through a consistent increase in pension assets and other key performance indicators.

  • PenCom secures top position among 50 regulatory agencies

    PenCom secures top position among 50 regulatory agencies

    The National Pension Commission (PenCom) has achieved a significant milestone by securing the top position in the 2023 Ethics and Integrity Compliance Scorecard (EICS) among 50 regulatory agencies in Nigeria, according to an assessment by the Independent Corrupt Practices and Other Related Offences Commission (ICPC).

    This was made known in a statement made available to reporters by PenCom.

    In the evaluation, PenCom also emerged the overall 14th position out of 404 Ministries, Departments, and Agencies (MDAs) on the comprehensive scorecard.

    Notably, PenCom achieved a commendable score, which was described by the ICPC as “substantial compliance”.

    Read Also; Why I didn’t sack Emefiele, Buhari explains in Adesina’s memoir

    The commission said: “In recognition of this achievement, the ICPC conveyed its commendation to PenCom, acknowledging the organisation’s commitment to upholding ethics and integrity in its operations.The ICPC particularly commended PenCom for its well-established structures and processes that promote efficiency, while encouraging management to maintain high service delivery.

    “The annual deployment of the Ethics and Integrity Compliance Scorecard by the ICPC aims to assess MDAs’ compliance with existing ethical, integrity, statutory, policy, and regulatory standards and practices. This initiative aligns with the Commission’s preventive mandate.

    The scorecard aims to minimise corruption risks, prevent system abuse, and revitalise ethics and integrity benchmarks in MDAs. The overarching objective is to ensure good service delivery while promoting a culture of ethical conduct within public service institutions.

    “PenCom remains committed to sustaining the well-acknowledged transparency in regulating the Nigerian pension industry for the benefit of pension contributors and retirees. This continues to manifest through a consistent increase in pension assets and other key performance indicators.’’

  • PenCom issues 30,293 Pension Clearance Certificates to employers

    PenCom issues 30,293 Pension Clearance Certificates to employers

    • ’How to apply for certificate’

    The National Pension Commission (PenCom) has issued Pension Clearance Certificates (PCCs) to 30,293 organisations that applied and met the requirements of the Contributory Pension Scheme (CPS), the Director-General of Commission, Mrs. Aisha Dahir-Umar, has said.

    Mrs Dahir-Umar in a document obtained by the newspaper stated that the organisations remitted about N148.24 billion for their employees.

    According to her, PenCom commenced the issuance of PCC to organisations in 2012 in line with the Pension Reform Act, 2014 (PRA, 2014), which mandates organisations with at least three employees to participate in the CPS.

    The PCC is an evidence of compliance with the PRA 2014 and serves as a prerequisite for suppliers, contractors, or consultants soliciting any contract or business from the Federal Government’s Ministries, Departments, and Agencies (MDAs).

    Accordingly, PenCom issues PCCs  that apply and have complied with the requirements.

    In the document, she said there was an increase of 3,737 from the 26,556 organisations that obtained the certificate in 2022.

    However, she said it is imperative to note that the PCC is valid up to  December 31 of the year it was obtained, irrespective of the date it was issued within the year.

    Consequently, 30,293 PCCs have expired on December 31, 2023. Therefore, organisations are required to apply for new PCCs for the year, she stressed.

    How to apply for Pension Clearance Certificate

    To qualify for a PCC, she said the employer must ensure that its employees open Retirement Savings Accounts (RSAs) with any Pension Fund Administrator (PFA) of their choice.

    She said: “Employers must also remit the employer and employee monthly pension contributions to the Pension Fund Custodians (PFCs) no later than seven working days from the payment date of salaries. Furthermore, employers with pension schemes which existed before the CPS must transfer Pension Funds and Assets in their custody to licensed pension operators.

    Read Also: PenCom to employees: know your rights

    “Finally, employers must provide their staff with a Group Life Insurance Policy (GLI) covering at least three times the yearly total emoluments of the employees.

    Requirements for the PCC

    The DG further stated that employers wishing to obtain certificate are required to submit their application with the following documents:

    She listed the documents as certified list of employees of the organisation as at the end of the last fiscal year, noting that the certification should be done with an authorised official stamp of the applicant organisation.

    “Others are certified rate of monthly pension contributions specifying employer and employee rates. The rates relating to the monthly emoluments are minimum of 10 per cent by the employer; and minimum of eight percent by the employee.

    “Evidence of remittance of monthly pension contributions for  employees and they include the last three fiscal years for organisations that were in existence for that period and have three or more staff members; for organisations that have not been in existence for the last three fiscal years, from the date of incorporation/registration/licensing to the last fiscal year.

    “Evidence of remittance of all outstanding pension contributions and penalties for late remittance; Evidence of transfer of pension fund and assets held prior to the commencement of the Contributory Pension Scheme (CPS) to a licensed pension fund operator.This is only applicable to organisations that had pension arrangements or were in custody of pension assets before June 2004; and Evidence of Group Life Insurance Policy procured for the staff of the organisation specifying the number of employees covered and the sum assured.

    Issues to note in application for PCC

    The PenCom boss said the processing of PCC applications are straightforward and transparent.

    Applications, she said, are processed within seven working days, provided that the requirements are met and requested documents are provided. Some of the noted deficiencies in the submissions by organisations include under-remittance of contributions; non-provision of Group Life Insurance for at least three times the total annual emolument of employees; and understating the number of employees and remittance of outstanding pension contributions.

    In the event of any deficiency, a notification is forwarded to the applicant for remedial action before the issuance of the PCC.

    She, however, said PenCom, in a  notice to employers published last September, warned employers against using third parties to get the PCCs, as they are encouraged to apply directly to avoid any hitches. “It is important to emphasise that the PCC is issued to the applicant organisation at no cost,’’ she said.

    She noted that PenCom is not paid any amount and the employer is only required to remit employee pension contributions into their RSAs.

    “A list of organisations that were issued the PCC is uploaded on the PenCom website to facilitate verification by interested parties. Consequently, any certificate not found on the website is invalid, as the list is updated daily. There is also an interface through which the Bureau of Public Procurement (BPP) verifies the PCCs of organisations as PenCom feeds BPP the information daily.

    “The 30,293 organisations that were issued PCCs in 2023 remitted about N148.24 billion for their employees. Since introducing the Pension Clearance Certificate in 2012, PenCom has observed increasing compliance with the CPS by the private sector,” she added.

  • Claim your residual pension funds, PenCom urges ex bank workers

    Claim your residual pension funds, PenCom urges ex bank workers

    • N58m claimed out of N12b

    If you worked in defunct Intercontinental bank, Afri Bank, Oceanic Bank, Citizens Bank, Diamond Bank and other defunct banks, you are to proceed to your Pension Fund Administrator (PFA) to claim your pension.

    The National Pension Commission (PenCom) made this call yesterday at the Pension Fund Operators Association of Nigeria (PenOp) media parley held in Lagos. The theme is “At the dawn of 20years Pension Reforms, what are the gains?”

    The funds are close to N12billion and only N58 million has been recovered or transferred to their owners.

    The pension money which according to PenCom was recovered by the commission recovery agents are unknown to the defunct bank employees.

    Speaking at the event, Head, Surveillance Department, Ehimeme Ohioma said there are some funds in the transition contribution fund of a lot of most of the employees that have worked in defunct institutions, most of whom do not know that they have the funds with various PFAs.

    He said: “To this end, the commission in September this year put a list of all the beneficiaries on the website according to each PFAs where the funds are located.

    “We expect these people to go to the commission’s website, search through the list and find their names. The list is comprehensive and it is on PenCom and PFAs website.”

    Read Also: PenCom to employees: know your rights

    Ohioma who said he had funds there too since 2014 without his knowledge, encouraged former bank employees to go on both PenCom and PFAs website.

    “Most people have worked in various institutions that have collapsed or have been acquired by other institutions and they do not know that they have contributions from their former employers from 2004 till date.

    “I didn’t know I have the fund. I had to call some of my other colleagues in the bank to claim their money. I am very sure that even if it is N200,000, many people will like it to be transferred to their RSAs.

    “The monies are the recoveries made by recovery agents engaged by the commission and they are with the PFAs. So people should go search their names and get their pension monies transferred to into their Retirement Savings Accounts (RSAs) to their PFAs. They are not going to be paid cash but it will be added to what they already have in their account”.

  • PenCom to employees: know your rights

    PenCom to employees: know your rights

    The National Pension Commission (PenCom) has reiterated the need for employees to know their pension rights as established in the Contributory Pension Scheme (CPS) and enshrined in the Pension Reform Act 2014 (PRA 2014).

    In this regard, PenCom Director-General, Mrs. Aisha Dahir-Umar  has called on the employees covered by the PRA 2014 to observe and report any violations of legal provisions in the Act.

    The PenCom boss in a statement also encouraged employees to regularly review their Retirement Savings Account (RSA) statements and report instances of non-remittance to the commission.

    She urged them to verify their employers’ adherence to the Group Life Insurance Policy (GLIP).

    She assured that the commission remains steadfast in its commitment to the effective regulation and supervision of Nigeria’s pension industry.

    She said: “The Pension Reform Act 2014 (PRA 2014) protects employees’ rights, offering crucial protection, compensation, and support throughout their careers and retirement. These rights extend to all employees enrolled on the Contributory Pension Scheme (CPS).

    “It is, therefore, crucial for both employees and employers to familiarise themselves with these rights to ensure compliance”.

    Ensuring the right to pension

    Mrs. Dahir-Umar explained that Section 3(1) of the PRA 2014 establishes a Contributory Pension Scheme for all employments in Nigeria. The scheme guarantees the payment of retirement benefits to covered employees.

    “It applies to employment in the Public Service, Federal Capital Territory, States, Local Governments, and the Private Sector. The PRA affirms the right of every employee covered under it to receive a pension”.

    Right to employer contributions

    PenCom to Employees: Know your Rights“Section 4(1) mandates employers to contribute a minimum of 10 per cent, while employees contribute a minimum of eight per cent of their monthly emoluments to the pension scheme. The PRA defines monthly emoluments as basic salary, housing, and transport allowances. Consequently, every eligible employee has the right to the employer’s contribution, a minimum of 10 per cent of their monthly pay”.

    Guaranteeing life insurance

    “Section 4(5) prescribes that every employer must maintain a Group Life Insurance Policy (GLIP) for each employee, amounting to three times the employee’s total annual emolument. This provision ensures that employees are entitled to life insurance coverage. Employers failing to fulfil their payment obligations must arrange for the settlement of claims arising from the death of any staff. Furthermore, the Revised Guidelines on GLIP for Employees, under Section 5.5, reinforce the importance of prominently displaying the GLIP certificate within employers’ premises”.

    Empowering retirement benefit choices

    Read Also: PenCom sensitises at trade fair on micro pension

    She further stated that every employee covered under the PRA 2014 has the right to determine how to access their retirement benefits, whether through Programmed Withdrawal or Annuity.

    “Section 7(1) specifies that a retirement savings account holder shall, upon retirement or upon reaching 50 years of age, choose between securing a Programmed Withdrawal or a Retiree Life Annuity. The retiree is also entitled to choose to take a lump sum or take higher periodic pension.

    Freedom to Choose a Pension Fund Administrator (PFA)

    Section 11(1) of the PRA 2014 grants employees the right to maintain an account with any Pension Fund Administrator. This provision ensures that employees can choose a PFA without interference from their employer or any third party”.

    Timely remittance of contributions

    “Section 11(3)(a) and (b) emphasises the right of every covered employee to timely remittance of contributions into their retirement savings account. Employers must remit employee and employer contributions no later than seven working days from the day the employee receives their salary”.

    Regular information on investment strategy and market returns

    “Every participant in the CPS is entitled to regular updates on their PFA’s investment strategy, market returns, and performance indicators. Section 55(d) of the PRA 2014 mandates PFAs to furnish such information regularly to all RSA holders.

    Accessible customer service support

    “RSA holders are entitled to customer service support. Accordingly, all PFAs are mandated to put in place structures that facilitate easy access to services such as RSA update, 25 per cent access due to job loss and request for RSA statements.

    Guarantee of pension and retirement benefits

    “Employees have the right to receive their pensions and other retirement benefits upon retirement. This includes lump sum disbursements, periodic pension payments, and en bloc payments as the case may be. The PRA 2014 ensures the payment of these benefits, safeguarding the financial security of retirees”, she added.

  • PenCom sensitises at trade fair on micro pension

    PenCom sensitises at trade fair on micro pension

    The National Pension Commission (PenCom) has sensitised Small and Medium Scale Enterprises (SMEs) and other informal sector workers on Micro Pension Plan (MPP) at the ongoing Lagos International Trade Fair.

    The Head, Micro Pensions Department PenCom, Dauda Ahmed, while speaking with journalists during the special day of the 137th Trade Fair organised by the Lagos Chamber of Commerce (LCCI), said the idea is to use a readily available platform like Trade Fair which brings in various stakeholders especially SMEs.’’These really are the groups we target’’,he added.

    He urged SMEs and other business owners to register for micro pension, stating that there are huge benefits therein.

    Ahmed said the turnout from the people was good in terms of making enquiries.

    He said: “We choose the LCII Special Day to showcase the micro pension plan. It has been an impressive experience because we got a lot of positive reactions. We interacted with SME’s that are present and even the general public that walks in to see PenCom stand and wonder what we do.

    Read Also: Old banknotes remain legal tender indefinitely, says CBN

    “We enlightened them on the things we do as a regulator and available products. We even explained to them how they can reach us if they have challenges too even with the mandatory plan which is the Contributory Pension Scheme”.

    Speaking on how Pension Fund Administrators will provide health insurance as an incentive to encourage workers in the informal sector to embrace micro pension, he said they are exploring it to ensure that people get all the benefits they ought to get.

    He disclosed that the industry is presently looking at providing health insurance and the modalities of how it can be funded.

    “We are saying that aside from the benefits of the plan in terms of opportunities to save, there are other streams of benefits. We know it is difficult for people to save. Some will ask what is in it for them if they subscribe. This is the kind of question that people ask And if you look at other jurisdiction where the plan is in operation, there are things that are put place to ensure that  people benefit while they are saving.

    “So for us as the regulator, we started to think that why can’t the PFAs provide incentives like health insurance for example.  Why don’t we key into the National Health Insurance Act (NHIA). If you save to a particular threshold for example, why can’t the PFAs take the cost off the participant as an added advantage to the people for participating in Micro Pension?

    “This is something that can give people the inspiration to continue to save. We are discussing with the PFAs and looking at how it can be funded, who is going to bear the cost and what is the threshold that should be considered”, he added.

    The LCII Chairman, Mr. Olawale Cole, said the trade fair avails producers and service providers the opportunity to interact.

    He said PenCom has taken a good step by coming to the trade fair to sensitise and enlighten the people to embrace micro pension.

    He also called on Nigerians to save through pension to earn an income when they are too old to work.

    Cole praised PenCom for the accomplished so far recorded.

    “This is possible because of PenCom’s innovative market friendly policies, introduction of products and services centered around value.  The commission has done well in encouraging voluntary contributions and inclusion of the informal sector in retirement plan”, he said.

  • PenCom mandates PFAs to open more branches across states

    PenCom mandates PFAs to open more branches across states

    • Gives 12-month deadline

    The National Pension Commission (PenCom) has ordered Pension  Fund Administators(PFAs) to open more branch offices and service centres in states  and across the federation to broaden and make their services effective.

    The commission has given a 12-month transition period for PFAs to adapt to the new requirements, ensuring a phased and systematic implementation to meet the stipulated conditions.

    In a recent circular directed at PFAs, the Commission outlined measures for establishing and operating branch offices and service centres. The circular issued in August 2023 consolidates the conditions for opening branch offices and service centres in one document.

    The circular established new standards the PFAs must meet regarding their branches, with the regulator emphasising the necessity for physical presence to meet pension consumers’ demands.

    According to PenCom, each PFA must open a branch office in any state with up to 10,000 funded RSAs. Moreover, for every additional 10,000 funded RSAs, PFAs must establish a service centre in a different location within the state. PenCom also mandates PFAs to open a service centre in a state with up to 2,000 funded RSAs.

    The Director-General, PenCom in a statement, said the latest move directly responds to the increasing demand for pension services nationwide.

    In addition she stated that, other objectives of PenCom are to significantly enhance the geographical coverage of PFAs and elevate their service delivery to Retirement Savings Account (RSA) holders.

    Read Also: PenCom recovers N25.13b unremitted pension contributions, others from employers

    She said: “Since its inception, the Contributory Pension Scheme (CPS) has enrolled over 10 million RSA holders. Pension assets have grown significantly, increasing to N17.34 trillion as of September, 2023. The expansion of the CPS in Nigeria has led PenCom to recognise the urgent need for an increased presence of PFAs nationwide.

    “Section 72 of the Pension Reform Act of 2014 (PRA 2014) empowers PFAs, subject to the approval of PenCom, to establish branch offices within or outside Nigeria. This provision enables a strategic and regulated expansion of the presence of PFAs, aligning with the increasing requirements for pension services across the nation.

    “In 2021, PenCom raised the Minimum Regulatory Capital (Shareholders’ Fund) requirement for PFAs from N1 billion to N5 billion in a move aimed at fortifying the financial capacity of PFAs. By April 2022, all PFAs had successfully met the new Shareholders’ Fund requirement. The recapitalisation has empowered PFAs to improve their capabilities in managing the increasing number of RSA holders and pension assets and expand branch operations”.

    The PenCom boss stressed that the expansion of branches promises to foster increased participation among those mandatorily covered under the CPS, noting that the expansion will facilitate and catalyse voluntary enrollment in the Micro Pension Plan (MPP) among informal sector workers and the self-employed.

    In emphasising the role of PFAs, she highlighted their responsibility to  create awareness and understanding of the CPS operations among employers, employees, and Micro Pension Contributors (MPCs).

    “This initiative underscores the objective of enhancing financial inclusivity and extending pension opportunities across various sectors of the workforce nationwide. PFA branch offices and service centres offer essential services, including registration and enrolment of contributors, updating records, and handling pension contribution schedules. Additionally, they process benefits applications, address enquiries, and provide comprehensive support services to RSA holders.

    “The circular outlined staffing requirements for PFA branches and service centres. The aim is to ensure that the offices are staffed with qualified, experienced individuals. The directive also strongly emphasised appropriate infrastructure, including suitable office spaces, robust ICT facilities, alternative power sources, and safety measures at branch offices and service centres. It also prohibited co-locations to maintain operational clarity and visibility.

    “The commission has allowed a 12-month transition period for PFAs to adapt to the new requirements, ensuring a phased and systematic implementation to meet the stipulated conditions. We believe that this drive for a more significant geographic presence and improved service delivery signifies a substantial leap towards ensuring comprehensive access to pension services while enhancing service quality for RSA holders nationwide. We remain committed to the effective regulation and supervision of the Nigerian Pension Industry to ensure that retirement benefits are paid as and when due”, Mrs. Dahir-Umar added.

  • Pension complaints and solutions

    Pension complaints and solutions

    MUHAMMED: Good day, I am Muhammed. My PFA is Access Pensions Limited. My complaint is that 20 months after retirement, I have yet to receive my payment while most of my colleagues have received their money. Please, what is happening?      

    PENCOM: Dear sir, your payment has been processed and paid. Please, visit your Pension Fund Administrator to confirm the payment.

    CANDIDUS: Hello, I am Candidus. I worked at the Joint Admissions Matriculation Board (JAMB). I have been processing my 25 per cent payment since April 2023 but my PFA Norrenberger Pension has delayed my data recapture for up to two months. Please help out. 

    PENCOM: Dear sir, your request is being processed.

    LAWSON: Dear Omobola, my name is Lawson. My Pension Administrator is Stanbic IBTC Pension Managers. For over four months, the National Pension Commission is yet to approve my retirement pension fund. According to Stanbic, PenCom kept rejecting it in their system/portal. There have been several calls for re-filing and re-submission, yet no positive feedback by Stanbic concerning my pension fund.

    What do I do? Do I engage lawyers to take up this matter with Stanbic IBTC Pension Managers and PenCom in court?

    I am tired of waiting. Thank you for your timely intervention in this important case.

    PENCOM: Dear Madam, your payment has been processed and paid. Please, visit your Pension Fund Administrator to confirm the payment.

    GHAZALI: Good day, a gentle reminder of my earlier submission last week. I applied for transfer of account from Access Pension to Leadway Assurance. I submitted request five weeks ago. Thank you.

    PENCOM: The Commission is yet to receive the request, please visit your Pension Fund Administrator to submit the application.

    INSPECTOR OSEZUA: Hello, my complaint is that I don’t know which pension administrator I belong to. I was enlisted into the Nigeria Police Force on November 1, 2008. I was told by Fidelity Pensions and Trustfund Pensions that my money has been transferred to PenCom.

    Till date I don’t know which PFA I belong to, whether my money is with PenCom or with Nigeria Police Pension NPF.

    Kindly assist me to know where I belong. Thank you.    

    PENCOM: Dear sir, please visit your preferred Pension Fund Administrator among the two PFAs and undergo the data recapture.

    SANI: My name is Sani. I worked at the West African Postgraduate Medical College, Yaba, Lagos. We chose Leadway Pensure Pfa Limited at Funsho Williams Avenue, Surulere, Lagos.

    My pension contributions (employer/employee) has been remitted to the Leadway.

    Also, my legacy has been fully remitted to Leadway. I retired since March 31, this year and have submitted the documents for RSA and legacy to be paid to me since May.

    Leadway told me that my documents were rejected because I did not put my pay slip. I sent the pay slip to them immediately. Since then, no payment has been made to me. Leadway’s response is that PenCom has not approved my documents for to pay me.

    Please, I want you to intervene so that my money can be paid to me. I have been a job for six months. Thank you.          

    PENCOM: Dear Sir, please carry out the enrolment, and submit the enrolment slip, you may wish to visit www.pencom.gov.ng for guidance on how to get enrolled.

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    MMADUAGWUNA: My name is Mmaduagwuna. I am soliciting  PenCom’s intervention to enable me access 25 per cent of my pension contribution.

    My PFA is Veritas Glanvills Pensions. I worked at FirstBank of Nigeria Limited between 2011 and  2018. I accessed 25 per cent of my contributions in 2018.

    Since then, I ventured into  importation but failed.  I have also ventured into PoS business but needed some funds to forge ahead. You can verify. Thank you.              

    PENCOM: The Commission is yet to receive the request. Please visit your PFA to submit the application.

    ÇHRISTIAN: Hello, My name is Çhristian from Warri Delta State. My complaint is that PenCom is the one delaying the payment. Please, I need explanation. My PFA is Trustfund.

    PENCOM: The Commission is yet to receive the request, Please, visit your Pension Fund Administrator to submit the application.

    JOHN: Hello, I applied for 25 per cent withdrawal with my PFA, Access Pensions since August 4, 2023. They are yet to make payment. I have been sending mails to info@pencom.gov.ng and consumer@pencom.gov.ng for the past two weeks but not a response from any of them. How do I publish my complaints because I want them sanctioned?

    PENCOM: Dear sir, Your application has been approved. Please visit your Pension Fund Administrator to confirm.

    TARTSEGHA: On the July 10, 2023, I complained that I retired in 2021 and did enrolment in August 2022.  My PFA is Stanbic Pensions.

    I am told that August and September enrolments have been paid. But I am yet to be paid. Thank you for helping retirees.

    PENCOM: Dear sir, your payment has been processed and paid, please visit your Pension Fund Administrator to confirm the payment.

  • PenCom recovers N25.13b unremitted pension contributions, others from employers

    PenCom recovers N25.13b unremitted pension contributions, others from employers

    The National Pension Commission (PenCom)  has  recovered N25.13 billion from defaulting employers.

    PenCom made this known in a report.

    The sum, it said, comprised N12.80 billion principal contributions, and N12.33 billion penalties for delayed payments.

    The amount covered between June 2012 and last month, PenCom added.

    The report read: “The Pension Reform Act of 2014 (PRA 2014) stipulates that eligible employees must maintain a Retirement Savings Account (RSA) with a Pension Fund Administrator (PFA) of their choosing. Once an RSA is established, the employee must furnish the employer with their RSA Personal Identification Number (PIN) issued by the PFA.

    “Subsequently, the employer must deduct the employee’s monthly contributions within seven working days of salary disbursement, comprising eight per cent from the employee and 10 per cent from the employer.

    “However, it is essential to note that the 18 per cent total monthly pension contribution represents the minimum, as employers can opt to increase the rate or bear the entire burden on behalf of the employee.

    “Under the PRA 2014, an employer who fails to deduct or remit contributions within seven working days is subject to a penalty of not less than two per cent of the total unpaid contributions for each month or part thereof.This penalty is reclaimed as a debt and credited to the employee’s RSA.

    “Recovery of outstanding pension contributions started with appointed Recovery Agents (RAs) in June 2012, and as of September 2023, 28 RAs are operating under PenCom’s supervision. This recovery endeavour aims to achieve several objectives, including reclaiming unremitted pension contributions along with penalties, ensuring that affected employees do not suffer income losses from investment delays, enhancing organisations’ compliance with the PRA 2014, and reducing employee complaints regarding non-remittance of pension contributions, thereby bolstering trust and acceptance of the Contributory Pension Scheme (CPS).”

    The report further stated that the Commission empowers the agents to pursue defaulters, adding that the they should start the recovery by getting a list of delinquent employers from PenCom.

    Read Also: PenCom enhances workers’ retirement benefits through benefits schemes

    “This is followed by securing letters of introduction from the Commission to the employers, introducing the RA and requesting cooperation in reviewing pension records with the organisation’s Human Resources Department to determine liabilities.

    “Subsequently, demand notices are served to employers to remit outstanding pension contributions and penalties. The RAs, then, collect evidence of payments, which is forwarded to the Commission for confirmation by the Pension Fund Custodians (PFCs).

    “It’s vital to highlight that the principal contributions and the recovered penalties are deposited into employees’ RSAs to compensate for the investment income that would have been accrued had there been no delays in employer remittances. Both PenCom and PFAs cover the recovery costs incurred by RAs, making it a cost-free for RSA holders. Pension contribution recovery efforts continue to yield significant results, with notable achievements in recovering primary contributions and associated penalties from non-compliant employers.

    “As a case in point, during the third quarter of 2023, a total of N326.16 million was retrieved. This sum breaks down to N276.52 million in contributions and N49.64 million in penalties, collected from 24 employers who had defaulted on their obligations.

    “Furthermore, PenCom pursues legal action against persistent defaulters who fail to remit pension contributions, ensuring accountability and adherence to the CPS. The commitment of employers to comply with the CPS is highly commendable.

    “PenCom issued an impressive 6,053 Pension Compliance Certificates (PCCs) to employers in the same period, signifying their commitment to the system. The sum of N35.59 billion was remitted into the RSAs of 98,887 employees working within the organisations granted PCCs, underlining the positive impact of these efforts.”

    PenCom urged employees to report employers who are non-compliant with their pension contributions or are not adhering to the specified rates (10 per cent employer and eight per cent employee) outlined in the PRA 2014.

    PenCom reiterated its commitment to effectively regulate and supervise the industry to ensure retirement benefits were paid promptly.

  • Retirees can get 50 % lumpsum, says PenCom

    Retirees can get 50 % lumpsum, says PenCom

    The National Pension Commission (PenCom) has affirmed that retirees under the Contributory Pension Scheme (CPS) can receive up to 50 per cent lumpsum from their pension pot at retirement.

    The Commission describes those who are eligible for 50 per cent as retirees with Retirement Savings Account (RSA) balance that is sufficient to apply for mode of payment of either Programme Withdrawal or Life Annuity Insurance for at least 50 per cent of the final salary based on the Annual Total Emolument (ATE) as at the date of his retirement.

    This was made known during the National Pension Commission (PenCom)/Nigeria Employers’ Consultative Association (NECA) Interactive Session on the Contributory Pension Scheme (CPS) for the Organised Private Sector organized by PenCom and held in Lagos.

    Presenting a paper on “Retirement Benefits Administration under the CPS”, the Head, Benefits and Insurance Department, PenCom,  Mr. Obiora Ibeziako said the two modes of accessing RSA are: Programmed Withdrawal plus Lump Sum and Annuity plus Lump Sum.

    He explained that to process payment, the Pension Fund Administration (PFA) should compute the monthly or quarterly pension on annuity and lumpsum from the retiree’s RSA balance using the Standard Retirement Benefits Computation (SRBC) Template issued by the Commission, which will guide the RSA holder on the choice of his or her preferred mode of payment.

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    He said: “Where the RSA balance is sufficient for PW/Annuity option, the monthly or quarterly pension/annuity shall be at least 50 per cent of the final salary based on the ATE as at the date of his retirement.

    “Where the RSA balance cannot provide 50% of the retiree’s ATE as a monthly/quarterly pension, such retiree shall be entitled to a concessionary Regulatory Lumpsum of 25% of the RSA balance.

    “Also, where the RSA balance cannot provide a monthly/quarterly pension or annuity of at least one-third of the prevailing minimum wage, the retiree shall be allowed to take the entire balance in the RSA en bloc.

    “Additional remittances shall first be applied to augment pension up to 50% of the retiree’s final salary, and the balance may be paid out as a lump sum. Where the retiree’s pension is already up to 50% of the final salary, the retiree may collect the additional remittances as a lump sum.

    “There shall be a periodic pension enhancement for retirees on PW based on the Return on Investment of funds in the RSA.’’