February 17, 2025
Business

‘How PenCom recovered N25.45bn from defaulting employers’

By Mathew Brangyet

The National Pension Commission (PenCom) said it has successfully recovered a total sum of N25.45 billion in unremitted pension contributions from defaulting employers between the years 2012 and 2023.

According to the pension commission, substantial amount encompasses the principal contributions of N12.93 billion and penalties totalling N12.52 billion in about 11 years.

Head of Corporate Communications of PenCom, Mr Ibrahim Buwai revealed this during the Finance Correspondents Association of Nigeria (FICAN) Annual General Meeting in Abuja.

Buwai highlighted the importance of the Pension Reforms Act, noting that the legislation mandates penalties for late remittances, accruing interest at a rate of 2% per month.

He emphasised the nearly equal distribution between recovered principal contributions and penalties, underscoring the comprehensive efforts to enforce compliance.

“From the inception of these recovery agents’ programmes in 2012 to December 31, 2023, the principal contributions that were recovered were about N12.9 billion while the penalty was about N12.5 billion.

“So, you can see that it’s almost 50-50. All this is what has been recovered from employers and paid into RSAs. The good thing is that all this penalty and principal goes into the individual RSA account.

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“Nobody takes a penny, not PFAs, not PenCom, nobody. All these money recovered were for RSA holders and it goes into RSA. What you can help us by way of employers is that it is not in their interests not to remit because it is cheaper to remit than not to remit,” Buwai explained.

PenCom’s recovery efforts are not without challenges. Buwai pointed out two major issues: employers failing to remit pension contributions and the lack of proper schedules accompanying remittances to Pension Fund Custodians (PFCs), which hampers the allocation of funds to RSA holders.

PenCom has taken proactive measures to combat these issues, including publicising a list of uncredited remittances and urging concerned parties to ensure compliance.

The communications head said: “We have the issue of employers not remitting. The second issue is that employers remitted but if there is no company schedule that shows the employers that these monies belong to Pension Fund Custodians (PFCs), they cannot apportion to RSA holders.

“We are not happy and that is why in 2023, we put out a statement on it and on our website, we have a long list of remittances that we saw were uncredited, calling on the people concerned to come forward and make sure the remittances are done.”

Ensuring Pension Fund Safety, he reiterated PenCom’s commitment to the safety of pension funds, Buwai assured that the regulatory body maintains strict guidelines to safeguard pension assets. These guidelines are meticulously designed to protect pension funds against potential investment risks.

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