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The proposed amendment of the Pension Reform Act 2014 will make non-compliance with the Contributory Pension Scheme (CPS) a criminal offence.
Chief executive officers of non-compliant institutions will also be held accountable and made to face the law, Omolola Oloworaran, director general, National Pension Commission (PenCom), has said.
Oloworaran said the Commission’s focus is a legislative partnership.
“This will enable establishing a pension legislature-working group that will partner with legislators to institutionalise reforms believed to be key and very important”, she said.
Oloworaran, who spoke during a quarterly media press briefing in Lagos recently, harped on the Commission’s zero tolerance for non-compliance with the Pension Reform Act.
She said, “Effective immediately, PenCom has launched an uncompromising compliance drive to ensure the Pension Reform Act is complied with by every operator. Every organization, public, private, big or small must comply with pension remittance obligations. No exceptions.”
Oloworaran stated that all Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) had been directed to ensure every vendor, service provider, and counterparties have a valid Pension Clearance Certificate (PCC) that evidences that they have been up to date and compliant with pension contribution.
“By 30th November this year, any entity without a PCC will be blacklisted and cut out from pension business with all PenCom regulated entities. This directive also extends to banks, investment counterparties, parent companies, and shareholders of licensed pension funds, administrators, and custodians.
“All pension fund affiliated entities must enforce the pension clearance certificate requirement across their operators and across all ecosystems and submit annual compliance attestations”, she said.
She further said, “We are drawing a red line in the sand. Pension compliance is no longer optional. It is existential.” Only those who value the future of their employees can participate in this ecosystem and the reward that it offers.”
In Nigeria, the Contributory Pension Scheme (CPS) is mandatory for employees in the public service of the federation, Federal Capital Territory, States, and Local Governments as well as those in private sector organisations with three or more employees.
Self-employed individuals and those in organisations with fewer than three employees can also participate through the Micro Pension Plan.
The minimum contribution under the Act is 18% of monthly emoluments, with a minimum contribution of 10% by the employer and eight percent by the employee.
If the employer decides to bear all the contributions, the minimum contribution is 20% of the monthly emolument, according to the 2014 Pension Reform Act.
