The increasing failure of companies to remit their workers’ monthly pension contributions, despite making deductions from employees’ salaries, is raising tension among workers in the private sector, LEADERSHIP Weekend has learnt.
This is even as erring employers who failed to remit pension benefits of their workers have been forced to cough out N29.65 billion, comprising outstanding pension owed and monetary penalties for not remitting as and when due.
Cumulatively, defaulting employers in Nigeria have paid approximately N14.348 billion in penalties for non-remittance of pension contributions under the Contributory Pension Scheme (CPS) from the inception of recovery exercises in June 2012 to December 2024. This amount is part of a total recovery of N28.187 billion, which includes N13.829 billion in outstanding pension contributions and the rest as penalties.
From June 2012 to December 2022 alone, the sum recovered in penalties was about N11.901 billion out of N24.149 billion total recoveries, which increased further through 2023 and 2024.
Additionally, between the first quarter of 2024 and the first quarter of 2025, N2.45 billion in penalties were recovered from defaulting employers, underscoring Pencom’s ongoing stringent enforcement.
Therefore, from 2014 through 2025, the cumulative penalties paid by pension fund defaulters likely sum to at least N14.3 billion, reflecting decisive regulatory actions to enforce pension fund remittance compliance.
Part 2, Section 4 of the Pension Reforms Act (PRA) 2014 states that the Contribution for any employee to which this Act applies shall be made in the following rates relating to his monthly emoluments-(a) a minimum of 10 per cent by the employer, and (b) a minimum of eight per cent by the employee.
While an eight per cent contribution due to an employee would be deducted from his salary by his employer and remitted alongside the company’s 10 per cent, making a cumulative 18 per cent to the Retirement Savings Account(RSA) of its workers, most employers are now circumventing this provision.
They, in most cases, withdraw employees’ portion and fail to remit the same to his or her Retirement Savings Account (RSA). They do this by withdrawing eight per cent from workers’ salaries. They would rather remit the 10 per cent contribution to its workers’ RSA, or only remit workers’ portion, without the company’s contribution or even remit.
To address this, the National Pension Commission (PenCom), in a document on the state of the Nigerian Pension industry(1st Quarter, 2025, sourced by LEADERSHIP, shows that, in Q1 2025, the Commission sustained its enforcement efforts to recover outstanding pension contributions from non-compliant employers.
In Q1, 2025, a total of N1.35 billion was recovered from 19 defaulting employers, comprising N972.12 million in outstanding contributions and N381.88 million in penalties. In addition, 12 persistently non-compliant employers were referred to the commission’s Legal Department for prosecution.
Since the commencement of the recovery initiative in June 2012 up to 31 March 2025, the commission disclosed that a cumulative total of N29.65 billion has been recovered, consisting of N14.86 billion in principal contributions and N14.79 billion in penalties.
“PenCom is determined to ensure 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,” it pointed out.
Another document, also sourced from the pension fund operators under the auspices of the Pension Fund Operators Association of Nigeria (PenOp), gave a further breakdown: N161.03 million was recovered in Q4 ’24, N106.87 million was recovered from defaulting employers in Q3 ‘24, and N165.63 million was paid as penalties.
In Q2’2024, N125.57 million was recovered from defaulting employers, while N210.68 million was paid as penalties. In Q1’2024, N751.51 million was recovered from defaulting employers, while N1.44 billion was paid as penalties.
Responding on behalf of operators, PenOp said: “Over the last five quarters (Q1’2024-Q1’2025), PenCom’s enforcement has delivered steady recoveries from defaulting employers. The highest total recovery occurred in Q1 2024, when N751.51 million in outstanding contributions and N1.44 billion in penalties were recouped.
“Activity dipped through mid-2024, ticked up in Q4, and then rebounded strongly in Q1 2025 with N972.12 million in contributions and N381.88 million in penalties recovered from 19 employers. That mix matters. While Q1 2025 wasn’t the highest quarter overall, it posted the strongest principal (contribution) recovery of the period and the highest average haul per employer, about N71 million versus roughly N63 million in Q1 2024, suggesting larger, more material cases were tackled even as the number of defaulters fell.
“Across the five quarters, recoveries summed to about N2.12 billion in contributions and N2.45 billion in penalties from 138 defaulting employers, evidence that enforcement continues to safeguard workers’ retirement savings.”
The group stated that the pattern also highlights what’s next: moving from episodic crackdowns to durable prevention by tightening real-time remittance monitoring, escalating sanctions for chronic defaulters, and deepening employer education to reduce repeat offenses.
“The goal isn’t just big recovery headlines; it’s fewer defaults, faster remittances, and a stronger, more predictable Contributory Pension Scheme. Workers must know their rights. All employers engaging three or more staff are required by law to remit pensions on behalf of their employees,” it pointed out.
Meanwhile, some affected workers who spoke to LEADERSHIP yesterday were embittered that their employers were joking with their retirement life by their nonchalant attitude, urging PenCom to come to their rescue.
A Lagos resident who works at a company in Ikeja, Lagos, Rufai Kabir said, he was getting alerts of payment from his Pension Fund Administrator (PFA) on a monthly basis before, but all of a sudden, it stopped. When he enquired from his PFA, he was told his company no longer send in his contributions. “I approached the company on what the issues were, they told me that my organisation is passing through time now. Once, we scale through this challenging time, we will start the contributions, that was what the management told me,” he stressed.
Similarly, Kingsley Peter, whose company is on the Island in Lagos, expressed similar concern. He said, his company does not have any pension plan for workers and all attempts by workers to persuade the management to subscribe to the new pension scheme failed.
Kunle Ajeromi works at a factory in Agbara area of Ogun State. He has been with the company for over 9 years, yet, the company has no pension plans for workers. He said, he always envy his colleagues working in other companies with pension benefits, hoping to one day, work in a company that values the retirement of their workers.
These are the experiences most workers, especially those on Contract capacity, were undergoing as employers continued to toy with the retirement lives of employees across the country. They all called for government intervention so that they wouldn’t retire into penury.
Earlier, the executive secretary/CEO, PenOp, Oguche Agudah disclosed that, operators are cooperating with the regulator to sanction erring companies, urging aggrieved workers to explore the whistleblowing mechanism of the pension industry by reporting erring companies to either the PFAs or PenCom for redress, promising that, their grievances would be addressed without implicating the whistleblowers.
At a forum in Lagos recently , the director general of PenCom, Ms. Omolola Oloworaran had said, employers that failed to enroll their contract staff in the Contributory Pension Scheme (CPS) would be heavily sanctioned from November 30, 2025.
To this end, she said, PenCom has issued a directive to all Licensed Pension Fund Operators (LPFOs), comprising PFAs and Pension Fund Custodians (PFCs) to prohibit transacting with service providers and vendors that do not remit pensions for their employees as evidenced by a Pension Clearance Certificate issued by PenCom.
She submitted that, Section 2 of the PRA 2014 mandates all employers in the public and private sectors—including Federal, State, and Local Governments—to participate in the Contributory Pension Scheme (CPS) and remit pension contributions no later than seven working days after salary payments.
According to her, despite continuous engagement and enforcement measures, a significant number of employers remain non-compliant with this legal obligation, noting that, the commission intensified regulatory actions by appointing Recovery Agents (RAs) to audit defaulters, recover outstanding contributions, and enforce sanctions.
Similarly, Ms. Omolola Oloworaran raised alarm over widespread non-compliance with the Pension Reform Act (PRA) 2014 by media organisations in Nigeria, revealing that, newspaper owners owe journalists over N720 million unpaid pension contributions.
Disclosing this during a courtesy visit to the President of the Newspaper Proprietors’ Association of Nigeria (NPAN), Kabiru Yusuf, in Abuja recently, the DG described the findings as very troubling and called for urgent collaboration between PenCom and newspaper proprietors to enforce compliance across the sector.
PenCom acknowledged the deep value of the media’s role in shaping public discourse and said it is disheartening that many organisations within the media are failing to meet a fundamental obligation to their employees.
The director general said that PRA 2014 mandates all employers to remit pension contributions to their employees monthly, within seven days of salary payment, adding that PenCom has been engaging employers across industries to drive awareness and compliance in private and public sectors.
She said the commission had taken many defaulting employers to court, and they have been prosecuted. Some have been forced to cough up their debt and paid monetary penalties for such default. She promised that the commission would always provide the best direction for the pension industry to increase its participation in the country’s economic growth and development.
