Home Business In Nigeria, pension defaulting employers pay N6.19bn fines in 4yrs

In Nigeria, pension defaulting employers pay N6.19bn fines in 4yrs

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By Francis Arinze Iloani

Employers that failed to remit pension contributions of their employees paid fines amounting to N6.19 billion to the National Pension Commission (PenCom) in the last four years.

Data from PenCom show that from the fines were collected between the first quarters of 2014 to the last quarter of 2017.

The data also show that the defaulting employers also paid the principle pension contributions for the 48 months amounting to N3.78 billion.

Analysis indicates that from 2014 to 2017, PenCom recovered a total of N9.97 billion, comprising principal contribution and fines paid by defaulting contributions.

In 2012, PenCom engaged recovery agents to review pension records of employers in order to uncover those defaulting in compliance.

Section 11 subsection 3(b) of the Pension Reform Act, 2014 (PRA, 2014), states that “the employer shall not later than 7 working days from the day the employee is paid his salary remit an amount comprising the employee’s contribution under paragraph (a) of this subsection and the employer’s contribution to the Pension Fund Custodian specified by the Pension Fund Administrator of the employee.”

Section 11(6) & (7) and Section 24 (d) of the PRA, 2014 provide that non-remittance of the contributions as and when due attracts penalty to be stipulated by the commission. The penalty shall not be less than 2 per cent of the unpaid contribution and is recoverable as a debt. 

In line with these provisions of the pension law, PenCom has recovered a total of N13.70 billion as both principal contribution and fines since inception of the recoveries in 2012.

“These amounts have since been credited to the respective RSAs of the employees as at fourth quarter 2017,” PenCom stated in its fourth quarter 2017 report.

In 2017 alone, PenCom filed cases against 61 employers that failed to remit the outstanding pension contributions and penalty as established by the Agents.

“The Commission have continued to record success with respect to matters at the tribunal. Most of the employers have requested to settle out of court while others have remitted their outstanding pension contributions with penalty to the respective RSAs of their employees,” PenCom revealed.

Source: Daily Trust

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