'Report defaulting employers' - PenCom tells workers

The National Pension Commission (PenCom) has encouraged workers to report employers who fail to remit their deducted pension.

The Director-General, PenCom, Mrs. Aisha Dahir-Umar, made this known in a report.

According to her, the commission is taking legal steps to recover pension contributions.

She added that in 2023, PenCom recovered N1.47 billion from defaulting employers, with N864.69 million recovered as principal contributions and N608.90 million as penalty for the non-timely remittance of the contributions.

She added that PenCom prosecutes recalcitrant employers who default in the remittance of pension contributions, adding that from 2013 to 2024, PenCom recorded 1,073 recalcitrant employers.

Mrs. Dahir-Umar encouraged workers to report employers who are not remitting the full 10 per cent and eight per cent employee components of the contributions.

She said: “Subsequently, the employer is required to remit an amount comprising at least eight per cent employee and 10 per cent employer contribution to the Pension Fund Custodian (PFC) specified by the PFA of the employee. Also, the PRA 2014 mandates employers to remit pension contributions not later than seven working days from the day salaries are paid to employees.

“Employers failing to or delaying in remitting their employees’ pension contributions are flouting the PRA 2014. We have put in place a mechanism to recover pension liabilities, including penalties, from defaulting employers and so we encourage employees to report their employers, who are not remitting pension contributions into their Retirement Savings Accounts (RSAs) as required by the PRA 2014. We allow employees to anonymously report their defaulting employers. When such complaints are received, the employers are compelled to remit the principal contributions with penalties.

The PenCom DG said: “Section 11(6) of the PRA 2014 states that an employer who fails to deduct or remit the contributions within the stipulated time frame of seven working days from the day salaries are paid shall, in addition to making the remittances already due, be liable to a penalty.

“This penalty shall not be less than two per cent of the total contributions that remain unpaid for each month or part of each month the default continues. The amount of the penalty shall be recovered as a debt owed and paid into the employee’s RSA. Employers should be mindful that promptly remitting pension contributions is more cost-effective than risking penalties due to non-compliance or delayed remittance, as such penalties can be substantial.

“In addition, the PRA 2014 empowers PenCom to authorise the examination, inspection, or investigation of an employer relating to pension funds or assets. This provision ensures compliance by employers and mitigates complaints from employees and PFAs on non-remittance of pension contributions by some employers.”

BEB