Enforcement has proven to be the best approach to recovering unremitted pensions, as Recovery Agents engaged by the National Pension Commission (PenCom) have recovered N16.37 billion from defaulting employees to date.
According to industry regulator, the total recoveries comprise principal contributions of N8.37 billion and penalty of N8.00 billion, and these have since been credited to the respective Retirement Savings Account (RSAs) of the employees.
In the Commission’s report for third quarter 2019 available on its website, PenCom maintained the services of Recovery Agents (RAs) for the recovery of outstanding pension contributions and penalty from defaulting employers.
The RAs were mandated to review the pension records of the employers assigned by the Commission and recover outstanding pension contributions with penalty.
The Commission stated that during the quarter, demand notices were issued to 18 defaulting employers whose pension liabilities had been established by the RAs.
This resulted in the remittance of outstanding pension contributions of N364.68 million, representing principal contributions of N146.95 million and penalty of N217.73 million during the third quarter period of last year, the Commission said.
PenCom said it has sustained its effort at collaborating with social partners to drive compliance with the provisions of the PRA 2014 by the Organized Private Sector (OPS).
The Commission in collaboration with the Nigeria Employers’ Consultative Association (NECA) organized interactive sessions with the OPS on the “Current Developments and Challenges” in the implementation of the CPS.
The interactive sessions held in September, 2019 in Lagos, Port Harcourt, Abuja and Kano provided a platform for the Commission to interact with the OPS on the implementation of the CPS.
“The sessions also provided an opportunity to update stakeholders on recent developments, address concerns, clarify issues and discuss the expectations of the contributors, with a view to improving compliance with the provisions of the PRA 2014.
Furthermore, the Commission obtained valuable feedback from the OPS on the implementation of the CPS during the sessions.
Oguche Agudah, CEO, Pension Funds Operators Association of Nigeria (PenOp) said the concept of using recovery agents to tackle the issue of unremitted pensions is a good development and they have been quite useful over the years.
He said their efforts are applauded and encouraged. However, In addition to the recovery agents, we need to do more on enlightenment of the public (both employers and employees) on the benefits of taking an active part in the contributory pension scheme.
Agudah also said that“Taking part in the scheme, reduced a company’s effective tax rate, because their contributions are tax exempt. In addition, it is a tool for employee engagement, retention and attraction.”
“Furthermore, when companies want to raise money from the organized financial markets, they will be required to show compliance with the provisions of the pensions act. So, while we encourage the efforts of recovery agents and the use of sanctions and penalties in tackling the issue of unremitted pensions on the one hand, on the other hand, we are also selling the benefits of the CPS to employers of labour on the other hand. Contributing to the pension scheme is essentially a win – win scenario for everyone, says Agudah.
