PenCom recovers N14.01b pension liabilities from defaulting employers

The National Pension Commission (PenCom) through its appointed recovery agents has recovered unremitted pensions from defaulting employers to the tune of N14.01 billion as at first quarter ending 31st March 2018.

PenCom as part of efforts towards recovery of outstanding contributions and interest penalty from defaulting employers, during the quarter under review, approved the re-engagement of fourteen (14) Recovery Agents (RAs).

Therefore, following the issuance of demand notices to defaulting employers whose liabilities had been established by the RAs, some employers had remitted the outstanding pension contributions and penalty totaling N309.38 million. This represented principal contribution of N209.32 million and penalty of N99.56 million, which brought the total recoveries made to date to N14.01 billion, comprising principal contribution of N7.16 billion and penalty of N6. 85 billion.

The Commission continued to apply various strategies to ensure compliance with the provisions of the Pension Reform Act (PRA) 2014. This included the application of sanctions and collaboration with key stakeholders on public enlightenment campaigns. The continuation of the work of Pension Recovery Agents earlier engaged to recover unremitted pension contributions from defaulting employers was a significant compliance and enforcement activity carried out during the period.

Also during the quarter under review, the Commission received 5,828 applications for issuance of compliance certificates. Out of these applications, compliance certificates were issued to 4,634 organisations while applications from 1,194 were declined due to non-remittance of pension contributions for the appropriate period and/or non- provision of Group Life Insurance Policy for the employees. The sum of N48.94 billion was remitted into the Retirement Savings Accounts (RSAs) of 10,020 employees by the 4,634 organisations that were issued the certificates.

During the quarter under review, the pension industry recorded a 1.93 percent growth in the scheme membership, moving from 7.89 million contributors at the end of the preceding quarter to 8.04 million.

The growth in the industry membership according to the Commission was driven by the Retirement Savings Account (RSA) Scheme, which had an increase of 152,065 contributors representing 1.94 percent. However, membership of the Closed Pension Fund Administration Scheme (CPFA) declined by 41 members (23,656) while the Approved Existing Scheme (AES) membership remained unchanged at 40,951.

A breakdown of the RSA registrations indicates a 1.09 percent (38,006) increase in RSA membership from the public sector during the first quarter of 2018 to stand at 3,516,873. This figure represents 44.09 percent of the total RSA registration as at the first quarter of 2018,

Membership from the private sector increased by 2.63 percent (114,059) in the quarter under review, which brought total registrations from the private sector to 55.91 percent (4,459,103) of the total RSA registration as at the reporting period, moving from 4,345,044 in the fourth quarter of 2018.

This can be attributed to the increased level of compliance by the private sector as a result of the various steps taken by the Commission to improve compliance and coverage, as well as marketing strategies of the PFAs.

Meanwhile, the total monthly pension contribution made by contributors from both the public and private sectors into their RSAs was N4.63 trillion as at the end of first quarter, 2018.

This shows an increase of N 139.70 billion representing 3.11 percent over the total contributions as at the end of March 2017.

A review of the aggregate total contribution shows that the public sector contributed 51.11 percent of the total contributions, while the private sector contributed the remaining 48.89 percent. However, during the quarter under review, the public sector contributed 48.24 percent of the total contributions received while the private sector contributed 51.76 percent.        

The aggregate total pension contributions of the Private sector increased from N2.19 trillion as at fourth quarter of 2017 to N2.26 trillion as at the end of the reporting period representing a growth of 3.30 percent.

Whereas, the aggregate total pension contribution of the public sector grew by 2.93 percent from N2.30 trillion to N2.36 trillion over the same period.

The objectives of the Pension Reformsare to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due.

It is also to assist individuals by ensuring that they save in order to cater for their livelihood during old age and thereby reducing old age poverty; and also, to ensure that pensioners are not subjected to untold suffering due to inefficient and cumbersome process of pension payment.

It also aims at establishing a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the public service of the federation, federal capital territory and the private sector and stem growth of outstanding pension liabilities.

Modestus  Anaesoronye