Employers Cough Out N27.6bn For Pension Defaults, Penalties

Erring employers who failed to remit the pension benefits of their workers have been forced to cough out N27.6 billion, consisting of outstanding pension owed and monetary penalties for not remitting as and when due, LEADERSHIP can now reveal.

A document on the state of the Nigerian Pension industry in the First Quarter of 2024 recently released by the National Pension Commission (PenCom) disclosed that, from the commencement of the recovery exercise in June 2012 to 31st March 2024, a total sum of N27.64 billion comprising of principal contributions of N13.68 billion and penalties of N13.96 billion was recovered from defaulting employers.

During the quarter, however, the sum of N2.194 billion comprising principal contributions (N751.51 million) and penalties (N1.443 billion) was recovered from 31 defaulting employers, even as the commission’s Secretariat/Legal Advisory Services department had been requested to take legal action against 3 defaulting employers.

The commission, in the report, maintained that it has employed the services of 25 Recovery Agents (RAs) for the recovery of unremitted pension contributions and penalties from defaulting employers.

Huge pension liabilities believed to be in the region of N400 billion in States as well as the negligence of some private sector employers to remit pension contributions of their workers, is slowing down the pace of growth of the pension fund assets, LEADERSHIP learnt.

Although, the pension assets have risen from a deficit of N2 trillion in 2004 when it was created, and is currently hitting N20 trillion, market observers believe the assets could have risen beyond what it is now, if all States of the federation and most private sector players subscribe to the Contributory Pension Scheme (CPS) and remit pension contributions of their employees as and when due.

The director general, PenCom, Aisha Dahir-Umar had sometime ago disclosed that, though, if there is effective compliance from States as well as the private sector players, the fund could have grown at a rapid speed, she added that, her commission is not relenting in a bid to fully enforce compliance.

She said, the commission had taken lots of defaulting employers to court and they have been prosecuted, while some have been forced to cough out their debt as well as paid monetary penalty for such default, promising that, the commission will always provide the best direction for the pension industry to increase its participation in economic growth and development of the country.

“PenCom is determined to ensure that Nigerian workers receive their retirement benefits in time. The commission’s meticulous regulation and supervision of the pension industry had ensured that pension assets and the contributory pension scheme (CPS) membership continued to grow,” she pointed out.

Speaking on behalf of pension fund operators, the chief executive officer (CEO) of the Pension Fund Operators Association of Nigeria (PenOp), Oguche Agudah, had earlier said, pension operators are working assiduously to grow the pension fund assets contributed by RSA holders, while trying to balance between safety and returns on investments.